HZS\n 

1904 


WILLIAMS  AND  ROGERS  SERIES 


c 


AT    LOS  ANGELES 


WILLIAMS   &  ROGERS  SERIES 


Modern  Illustrative  Banking 


BY 

E.   VIRGIL   NEAL 

AUTHOR  MODERN   BANKING  AND   BANK  ACCOUNTING 

AND 

JOHN    H.   MOORE 

DIRECTOR  COMMERCIAL   DEPARTMENT 
CHARLESTOWN    HIGH  SCHOOL,    BOSTON,    MASS. 


NEW  YORK  •:•  CINCINNATI  •:•  CHICAGO 

AMEEICAN    BOOK    COMPANY 


Copyright,  1902  and  1904,  by 
AMERICAN    BOOK.  COMPANY. 


BANKING. 
W.    P.    II 


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PREFATORY   NOTE 

This  text-book  on  banking  is  designed  to  reproduce  as  nearly  as  possible  the  prac. 
tical  workings  of  a  national  bank.  A  detailed  account  of  the  organization  and  practical 
management  of  banks  is  given,  but  the  books  are  opened  from  statements  showing  the 
condition  of  a  bank  that  is  in  operation.  For  the  purpose  of  illustrating  the  actual 
routine  of  a  national  bank  many  attractive  incoming  documents  and  an  envelope  of 
blank  business  forms  have  been  prepared  to  accompany  the  text.  The  incoming 
documents  are  made  the  basis  of  a  series  of  transactions  which  the  student  is  required 
to  record  in  the  various  bank  books,  and  the  blank  business  forms  are  used  in  preparing 
the  bank's  outgoing  documents. 

The  series"  of  transactions  is  arranged  to  cover,  in  abbreviated  form,  two  days' 
business  of  the  First  National  Bank,  Rochester,  N.Y.  During  the  first  day  all  of  the 
business  forms  of  the  bank  are  handled  by  the  student ;  but  during  the  second  day 
the  business  forms  are  dispensed  with  and  only  the  entries  for  the  various  transac- 
tions are  recorded,  historical  data  for  them  being  furnished  in  the  text. 

The  work  is  so  classified  as  to  show  the  ordinary  duties  devolving  upon  the  various 
bank  officers  and  clerks.  At  the  close  of  the  second  day's  practice  dividends  are 
declared,  statements  made,  and  the  books  closed.  Care  has  been  taken  to  furnish 
sufficient  material  to  make  these  statements  and  the  necessary  closing  entries  illustra- 
tive of  this  feature  of  bank  accounting. 


389084 


CONTEXTS 


PART   I  — BANKS   AND   BANKING 


The  Business  of  Banking 

National  Banks   . 

State  Banks 

Private  Banks  and  Bankers 

Savings   Banks 

Loan  and  Trust  Companies 

Bank  Officers  and  Clerks 

Banking  Customs 


PART   II  — BANK    ACCOUNTING    (With  Vouchers) 

Books  Used    .... 

Condition  of  the  First  National  Bank,  Rochester,  N.Y 

Receiving  Teller's  Work 

Paying  Teller's  Work 

Discount  Clerk's  Work 

Collection  Clerk's  Work 

Note  Teller's  WrORK 

.Mail  Clerk's  Work     . 

Individual  Bookkeeper's  Work 

General  Bookkeeper's  Work    . 

PART  III  — BANK   ACCOUNTING   (Without  Vouchers) 

General  Instructions 
Receiving  Teller's  Work 
Paying  Teller's  Work 
Discount  Clerk's  Work 
Collection  Clerk's  Work 
Note  Teller's  Work 
M  \n.  Clerk's  Work    . 
Individual  Bookkeeper's  Work 
i.iMKw.  Bookkeeper's  Work    . 


PAGE 

I 

7 
12 
12 
13 
13 
14 
15 


.  24 

.  36 

.  41 

.  44 

.  48 

.  53 

.  55 

.  57 

.  59 

.  61 


63 
63 
64 
65 
66 
67 
68 
70 
71 


PART   IV  — SUBSIDIARY   SUBJECTS 

A  Clearing  House 75 

Foreign  Exchange 83 

Letters  of  Credit 85 

Travelers'  Cheques 87 


MODERN  ILLUSTRATIVE  BANKING 

PART   I.     BANKS   AND   BANKING 

THE    BUSINESS    OF    BANKING 
A  Bank  is  primarily  a  place  for  the  safe  keeping  of  money. 

A  Commercial  Bank  is  an  institution  organized  for  the  purpose  of  receiving 
deposits  of  money,  making  loans,  discounting  paper,  making  collections,  and  effecting 
the  transmission  of  money  from  one  place  to  another. 

A  Banker  is  a  dealer  in  money. 

Sources  of  Receipts.  The  available  funds  of  a  bank  consist  of  (1)  capital  paid  in 
by  the  shareholders  ;,  (2)  notes  it  can  circulate,  if  it  be  a  national  bank ;  (3)  money 
deposited  with  it  by  its  customers ;  (-1)  money  collected  for  customers  and  banks 
(which  is  frequently  held  a  short  time  before  being  paid)  ;  (5)  money  received  in  the 
course  of  transmission  (sale  of  exchange),  which  of  course  must  be  repaid  in  another 
place  ;   (6)  and  bills  rediscounted. 

Sources  of  Disbursements.  A  bank's  disbursements  consist  of  (1)  checks,  drafts, 
etc.,  cashed  by  the  paying  teller  ;  (2)  bills  discounted  ;  (3)  time  and  demand  loans 
made  :  (4 )  money  paid  out  for  current  expenses  ;'  (5)  shipments  of  money  to  other 
banks  in  settlements  of  balances  ;    (6)  and  interest  paid  on  time  deposits. 

Sources  of  Profits.  The  profits  of  a  bank  arise  mainly  from  discount,  interest, 
dividends  on  stocks  and  bonds  held,  and  collection  and  exchange. 

Services  rendered  Depositors.  The  principal  services  which  a  bank  renders  to  its 
depositors  are  :  (1)  it  affords  a  safe  and  convenient  place  in  which  to  keep  money  : 
(2)  it  pays  checks  as  directed  by  the  depositors  ;  (3)  it  collects  checks,  notes,  drafts, 
etc. ;  (4)  it  discounts  notes  for  and  makes  loans  to  the  depositors ;  (5)  it  provides 
means  for  the  transmission  of  money. 

Kinds  of  Banks.  Banks  are  divided  into  the  following  classes:  national,  state, 
and  private.  Banks  that  issue  notes  which  circulate  as  money  (as  national  banks)  a'"e 
often  termed  banks  of  issue,  while  those  which  do  a  discount  business,  but  do  not  issue 
bank  notes,  are  known  as  hanks  of  discount . 

NATIONAL    BANKS 

A  National  Bank  is  a  bank  organized  under  an  art  passed  by  Congress,  entitled 
"The  National  Bank  Act."  In  addition  to  doing  a  general  banking  business,  it  has 
authority  to  issue  circulating  notes  against  bonds  deposited  with  the  United  States 
Treasurer.      The  government  does  not  own  nor  conduct  the  bank,  but  only  authorizes 

7 


8  MODERN    ILLUSTRATIVE    BANKING 

its  creation  and  prescribes  its  mode  of  doing  business.  Every  banking  association 
doing  business  under  this  act  is  governed  by  the  same  principles,  is  subject  to  the 
same  inspection,  uses  the  same  forms  in  making  reports  to  the  Comptroller  of  the 
Currency  at  Washington,  and  is  liable  to  the  same  penalties  for  the  violation  of  any 
requirement  of  the  national  banking  laws. 

Comptroller  of  the  Currency.  National  banks  are  under  the  direct  supervision 
of  the  Comptroller  of  the  Currency,  Washington,  D.C.  This  officer  is  appointed  by 
the  President,  on  the  recommendation  of  the  Secretary  of  the  Treasury,  by  and  with 
the  advice  and  consent  of  the  Senate.  He  holds  his  office  for  a  term  of  five  years,  and 
receives  a  salary  of  $5000  per  year.  He  is  required  to  give  bond  for  $100,000.  He 
must  not  be  interested  in  any  national  bank,  and  must  make  a  report  to  Congress  once 
a  year.     He  appoints  all  bank  examiners  and  receivers  for  insolvent  national  banks. 

National  Bank  Examiners.  These  officials  are  appointed  by  the  Comptroller  of 
the  Currency  to  examine  the  affairs  of  national  banks.  They  are  paid  a  certain  amount 
for  each  bank  examined.  Under  the  law  there  is  no  limit  to  the  number  of  examiners 
who  may  be  appointed  or  the  number  of  times  a  bank  may  be  examined,  both  being  left 
to  the  judgment  and  discretion  of  the  Comptroller  of  the  Currency.  All  national  banks 
are  examined  at  least  once  a  year. 

Powers  of  National  Banks.  National  banks  have  power  (1)  to  adopt  and  use  a 
corporate  seal;  (2)  to  have  succession  for  a  period  of  twenty  years;  (3)  to  make  con- 
tracts ;  (4)  to  sue  and  be  sued ;  (5)  to  elect  directors,  and  by  their  boards  of  directors 
to  elect  officers  ;  (6)  to  make  all  needful  by-laws  not  inconsistent  with  the  national 
bank  act  ;  (7)  to  discount  and  negotiate  notes,  drafts,  bills  of  exchange,  etc. ;  (8)  to 
receive  deposits,  buy  and  sell  exchange,  coin,  and  bullion  ;  (9)  to  loan  money  on 
personal  security ;    (10)  and  to  issue  and  circulate  their  own  notes. 

An  act  of  July  12,  1882,  provides  that  a  national  bank  may,  any  time  within  two  years  previous  to 
the  date  of  the  termination  of  its  existence,  extend  its  period  of  succession  for  not  more  than  twenty 
years,  by  the  approval  of  the  Comptroller  of  the  Currency. 

The  words  "personal  security"  are  used  in  contradistinction  to  real  estate  security,  and  do  not  mean 
that  national  banks  are  limited  to  loaning  money  on  the  security  afforded  by  indorsers  or  personal  sure- 
ties. On  the  contrary,  national  banks  have  a  perfect  right  to  loan  mone)'  on  stocks  and  bonds,  bills  of 
lading,  warehouse  receipts,  choses  in  action,  or  other  personal  chattels.  In  the  absence  of  collateral, 
banks  usually  endeavor  to  get  at  least  two  names  to  all  paper  which  they  discount  or  upon  which  they 
make  loans,  but  such  is  not  obligatory  under  the  statute. 

Stockholder's  Liability.  Each  stockholder  of  every  national  banking  association 
is  held  individually  responsible  for  all  debts  and  engagements  of  said  banking  associa- 
tion to  the  extent  of  the  par  value  of  his  stock  in  addition  to  the  amount  invested  in 
such  stock.  In  other  words,  if  a  stockholder  owns  $2000  in  capital  stock  of  a  national 
bank,  and  such  bank  should  fail,  he  may  be  called  upon  by  the  Comptroller  of  the 
Currency  to  pay  into  the  bank  -12000  in  cash  in  addition  to  the  loss  of  his  stock,  if  this 
be  necessary  for  the  adjustment  of  the  bank's  liabilities. 

Real  Estate.  National  banks  are  prohibited  from  holding  real  estate  other  than 
the  buildings  in  which  they  do  business,  and  land  mortgaged  to  secure  a  loan  which 


ORGANIZATION   OF   A   NATIONAL   BANK  9 

was  made  in  good  faith  upon  personal  security,  but  such  land  cannot  be  held  for  a 
longer  period  than  five  years.  Banks  cannot  make  loans  on  their  own  stock  except  to 
prevent  losses  on  loans  previously  made. 

Reserve.  National  banks  are  required  to  keep  on  hand  at  all  times  a  lawful  money 
reserve.  This  reserve  must  equal  25%  of  the  deposits,  if  the  bank  is  located  in  a  large 
city,  and  15%  of  the  deposits,  if  it  is  located  in  a  small  city. 

Overcertifying  Checks.  National  banks  are  prohibited,  under  severe  penalty,  from 
certifying  a  check  in  excess  of  a  depositor's  account. 

Dividends  and  Surplus.  The  directors  of  a  national  bank  may  semiannually 
declare  a  dividend  of  so  much  of  the  profits  of  the  bank  as  they  deem  expedient ; 
but  before  declaring  a  dividend  one  tenth  of  the  net  profits  for  the  preceding  half 
year  must  be  carried  to  surplus  fund  until  the  fund  amounts  to  20%  of  the  capital 
stock. 

No  national  bank  may,  during  the  time  it  continues  banking  operations,  withdraw, 
either  in  the  form  of  dividends  or  otherwise,  any  part  of  its  capital  stock.  If  losses 
have  been  sustained  equal  to  or  exceeding  the  undivided  profits  on  hand,  no  dividend 
can  be  declared  ;  and  no  dividend  can  be  declared  to  an  amount  in  excess  of  the 
net  profits. 

Reports.  National  banks  must  make  at  least  five  reports  to  the  Comptroller  of  the 
Currency  during  the  year  at  such  times  as  he  may  call  for  them. 

ORGANIZATION    OF   A    NATIONAL    BANK 

Number  of  Persons  Necessary.  An  association  for  carrying  on  the  business  of 
national  banking  may  be  organized  by  any  number  of  persons  not  less  than  five. 

Capital  Required.  The  national  bank  act  provides  that  national  banks  in  cities 
of  50,000  persons  or  under  must  have  a  capital  of  not  less  than  $100,000.  If  the 
population  of  the  city  exceeds  50,000  persons,  no  national  bank  can  be  organized 
with  a  capital  of  less  than  $200,000.  In  towns  of  6000  inhabitants  and  under,  national 
banks  may  be  organized  with  a  capital  of  $50,000,  and  in  towns  of  8000  inhabitants 
and  under  with  a  capital  of  $25,000,  if  approved  by  the  Secretary  of  the  Treasury. 

Selecting  a  Name.  Only  those  banks  that  are  organized  under  the  national  bank 
act  can  make  use  of  the  word  "  national "  in  their  name  or  title.  To  use  the  name 
"First  National  Bank,"  "Second  National  Bank,"'  etc.,  a  bank  must  be  the  first, 
second,  etc.,  national  bank  organized  in  any  given  place. 

Securing  Subscriptions  to  the  Capital  Stock.  This  is  usually  done  by  a  com- 
mittee appointed  for  this  purpose.  It  is  generally  considered  wise  to  distribute  the 
stock,  so  far  as  can  conveniently  be  done,  among  the  varied  interests  of  the  city 
and  the  surrounding  country. 

The  subscriptions  are  taken  upon  a  blank,  which  contains  a  statement  of  the 
purpose  of  the  organization  ;  following  this  statement  are  spaces  for  the  date  of 
the  subscription,  name  of  the  subscriber,  address,  and  the  number  of  shares  sub- 
scribed for. 


10  MODERN    ILLUSTRATIVE   BANKING 

Notice  to  the  Comptroller  of  the  Currency.  When  the  promoters  have  selected 
a  name  for  the  bank,  the  Comptroller  of  the  Currency  should  be  notified  and  his 
approval  of  the  title  obtained.  The  notice  should  be  signed  by  at  least  five  subscribers 
to  the  stock. 

Natural  Persons.  The  corporators  must  be  natural  persons  ;  that  is,  human 
beings.  Corporations  and  joint  stock  companies  cannot  become  organizers  of  national 
banks.  Partnerships  are  also  excluded  under  the  terms  of  the  statute.  If  a  firm 
desires  to  take  stock,  it  must  do  so  through  one  of  the  partners  until  after  the 
corporation  is  formed,  when  the  stock  may  be  transferred  to  the  firm. 

Articles  of  Association.  Persons  desiring  to  organize  a  national  bank  should 
enter  into  articles  of  association,  which  specify  in  general  terms  the  object  for  which 
the  association  is  formed.  These  articles  may  contain  any  provisions  not  inconsistent 
with  the  law.  They  must  be  signed  by  five  or  more  of  the  persons  desiring  to  form 
the  association.  One  copy  of  them  must  be  forwarded  to  the  Comptroller  of  the 
Currency  to  be  kept  on  file  in  his  office,  and  another  copy  is  retained  by  the  bank. 

Special  forms  and  blanks  for  the  organization  of  national  banks  are  furnished  by  the  Comptroller  of 
the  Currency,  and  as  it  is  advisable  to  use  official  forms,  it  has  been  deemed  unnecessary  to  show  the 
special  forms  in  this  work. 

Organization  Certificate.  The  national  bank  act  provides  that  persons  desiring  to 
organize  a  national  bank  shall  make  an  organization  certificate  which  shall  specifically 
state  (1)  the  name  of  the  association  (which  shall  be  subject  to  the  approval  of  the 
Comptroller  of  the  Currency)  ;  (2)  the  location,  that  is,  the  place  where  the  operations 
of  the  bank  are  to  be  carried  on  ;  (3)  the  amount  of  the  capital  stock  and  the  number 
of  shares  into  which  it  is  divided  ;  (4)  the  names  and  residences  of  the  shareholders, 
and  the  number  of  shares  held  by  each  of  them  ;  (5)  a  statement  of  the  fact  that  the 
certificate  is  made  to  enable  such  persons  to  avail  themselves  of  the  advantages 
of  the  national  bank  act. 

Only  the  persons  who  signed  the  articles  of  association  may  sign  the  organization 
certificate.  Each  person  signing  the  certificate  is  required  to  acknowledge  his 
signature  thereto  before  a  notary  public  or  a  judge  of  some  court  of  record.  As 
soon  as  acknowledged,  the  certificate  should  be  filed  with  the  Comptroller  of  the 
Currency. 

Electing  Directors.  After  filing  the  articles  of  association  and  the  organization 
certificate,  the  next  step  is  to  elect  the  directors,  which  is  done  at  a  meeting  of  the 
stockholders  held  for  this  purpose. 

Number  and  Qualifications  of  Directors.  The  national  bank  act  requires  that 
every  national  bank  shall  have  at  least  five  directors,  and  that  each  director  must  own 
at  least  ten  shares  of  the  stock.  The  directors  must  all  be  citizens  of  the  United  States, 
and  at  least  three  fourths  of  them  must  have  resided  in  the  state  or  district  in  which 
the  association  is  organized  for  one  year  immediately  preceding  their  election.  The 
office  of  bank  director  is  a  very  responsible  one,  and  no  man  should  accept  it  if  his 
outside  duties  are  such  that  he  will  be  unable  to  give  the  necessary  attention  to  the 


ORGANIZATION    OF    A   NATIONAL   BANK  11 

requirements  of  the  position.  Every  director  must  take  an  oath  that  he  is  qualified  to 
fill  the  office,  and  that  he  will  faithfully  perform  the  duties  thereof. 

The  president  of  the  bank  must  send  the  oaths  of  the  directors  to  the  Comptroller 
of  the  Currency. 

Electing  Officers.  The  directors  should  elect  a  president,  vice  president,  and  cashier. 
The  cashier  usually  appoints  the  tellers  and  employs  the  clerks  and  other  assistants. 

Payment  of  Capital  Stock.  At  least  50%  of  the  capital  stock  of  every  national 
bank  must  be  paid  in  before  the  bank  will  be  authorized  to  commence  business.  The 
remainder  of  the  stock  must  be  paid  in  installments  of  at  least  10%  each,  as  frequently 
as  one  installment  at  the  end  of  each  succeeding  month  from  the  time  the  bank  is 
authorized  by  the  Comptroller  of  the  Currency  to  commence  business.  The  payment 
of  each  installment  must  be  certified  to  by  the  president  or  the  cashier  at  the  end  of 
the  month,  and  the  certification  forwarded  to  the  Comptroller  of  the  Currency.  Either 
the  president  or  the  cashier  may  be  directed  to  attend  to  the  collecting  of  the  first  pay- 
ment of  50%.  It  is  customary  to  collect  the  amount  and  deposit  it  in  some  bank  until 
the  association  is  ready  to  begin  business. 

Certificate  of  Payment  of  Stock.  When  50%  of  the  capital  stock  has  been  duly 
paid,  a  certificate  must  be  made  to  the  Comptroller  of  the  Currency  stating  the  amount 
paid  in  as  permanent  capital,  the  name  and  place  of  residence  of  each  director  and  the 
amount  of  stock  which  he  owns  in  good  faith,  and  that  the  bank  has  complied  with  all 
the  conditions  prescribed  by  the  national  bank  act.  This  statement  must  be  signed 
and  sworn  to  by  a  majority  of  the  directors  and  by  the  president  or  the  cashier. 

Deposit  of  United  States  Bonds.  Every  national  bank,  before  it  can  be  author- 
ized to  commence  business,  must  deliver  to  the  Treasurer  of  the  United  States  United 
States  registered  interest-bearing  bonds,  to  an  amount  not  less  than  one  fourth  of  its 
capital,  if  the  capital  is  $150,000  or  less.  If  the  capital  is  in  excess  of  $150,000, 
^."iO.OOO  in  bonds  must  be  delivered.  Before  the  bonds  are  delivered  they  must  be 
assigned  to  the  Treasurer  of  the  United  States.  In  making  the  assignment  great  care 
should  be  taken  to  give  the  correct  name  of  the  bank.  If  the  word  "The"  is  a  part  of 
the  corporate  name,  it  should  never  be  omitted.' 

Coupon  bonds  may  be  used,  as  the  Treasurer  of  the  United  States  is  authorized  to 
receive  them  and  issue  registered  bonds  for  like  amounts. 

Circulation.  A  national  bank  is  entitled  to  receive  from  the  Comptroller  of  the 
Currency  circulating  notes  in  blank  equal  in  amount  to  the  par  value  of  the  bonds 
deposited  with  the  Treasurer  of  the  United  States,  unless  the  bonds  should  be  below  par, 
in  which  case  it  may  receive  circulating  notes  for  only  the  market  value  of  the  bonds. 

An  order  for  circulating  notes  should  be  sent  to  the  Comptroller  of  the  Currency. 
The  bank  pays  for  the  engraving  of  the  plates  for  the  notes,  but  they  arc  printed  by 
the  Treasury  Department  and  forwarded  t<>  the  bank.  They  must  be  signed  by  the 
president,  or  vice  president,  and  the  cashier  of  the  bank. 

Tax  on  Circulation.  A  national  bank  is  required  to  pay  to  the  Treasurer  of  the 
United  States  a  semiannual  tax  of  ]%  of  the  average  circulation  secured  by  2%  gold 
bonds  and  ;i  semiannual  tax  of  A%  of  the  average  circulation  secured  by  all  other  bonds. 


12  •  MODERN   ILLUSTRATIVE   BANKING 

Certificate  of  Authority  to  commence  Business.  When  all  the  conditions  of 
the  national  bank  act  have  been  complied  with,  the  Comptroller  of  the  Currency  issues 
a  certificate  authorizing  the  association  to  begin  business.  The  bank  must  publish  the 
certificate  for  at  least  sixty  days  (a  weekly  insertion  is  sufficient)  in  a  newspaper 
published  in  the  city  or  the  county  in  which  the  bank  is  located. 

STATE    BANKS 

How  Organized.  State  banks  are  organized  under  the  laws  of  the  state  in  which 
they  are  located.  The  preliminary  steps  are  much  the  same  as  those  in  the  organization 
of  national  banks.  The  subscription  list  is  taken,  articles  of  association  and  a  name 
are  adopted,  and  a  board  of  directors  and  officers  elected.  A  copy  of  the  articles  of 
association  is  filed  with  the  superintendent  of  banking  of  the  state,  when  there  is 
such  an  officer,  or  with  the  Comptroller  of  the  Currency,  and  another  copy  is  filed  in 
the  office  of  the  clerk  of  the  county  in  which  the  bank  is  to  be  located. 

Circulating  Notes.  Previous  to  July  1,  1866,  state  banks  issued  notes  which 
circulated  as  money,  but  on  that  date  the  government  imposed  a  tax  of  10%  on  the 
circulation  of  all  state  banks,  which  had  the  effect  of  withdrawing  the  circulation,  as 
the  rate  was  too  high  to  allow  any  profit  to  the  banks. 

Difference  between  State  and  National  Banks.  National  banks  are  organized 
under  the  national  bank  act,  and  are  under  the  supervision  of  the  general  govern- 
ment at  Washington.  State  banks  are  organized  under  the  laws  of  the  various  states, 
and  are  subject  to  the  restrictions  imposed  by  the  statutes  of  the  said  states.  National 
banks  issue  circulating  notes ;  state  banks  do  not. 

Advantages  of  State  Banks.  It  is  claimed  that  state  banks  possess  some  advan- 
tages over  national  banks,  among  which  are  the  following :  (1)  they  are  not  examined 
so  critically  ;  (2)  in  some  cases  they  are  not  required  to  make  returns  to  state  officials, 
and  in  no  case  such  full  returns  as  are  required  by  the  national  bank  act ;  (3)  they  can 
certify  checks  in  excess  of  the  amount  which  a  depositor  may  have  in  the  bank  ; 
(4)  they  are  not  required  to  hold  United  States  bonds. 

PRIVATE    BANKS    AND    BANKERS 

Private  Banks.  A  private  bank  is  organized  and  operated  by  an  individual  or  a 
firm.  In  opening  such  a  bank  no  formality  is  required,  unless  restricted  by  statute. 
There  is  no  responsibility  to  the  government,  state  or  national.  The  safety  of  such 
banks  consists  in  the  financial  responsibility  of  the  individual  or  individuals  who  con- 
duct them.  The  business  of  private  banks  is  much  the  same  as  that  of  state  banks. 
They  receive  deposits  on  which  they  usually  allow  a  small  rate  of  interest ;  they  buy 
and  sell  exchange,  commercial  paper,  etc. 

Private  Bankers.     Private  bankers  are  of  two  kinds  :   (1)  those  who  conduct  a 

business  the  same  as  private  banks,  (2)  and  those  who  deal  in  foreign  exchange.     The 

latter  buy  commercial  bills  drawn  against  grain  and  other  produce  shipped  to  foreign 

countries,  sell  drafts  on  foreign  banks,  and  issue  letters  of  credit  to  travelers. 

In  New  York  state  all  private  banks  are  examined  by  the  state  bank  examiner,  and,  with  a  few 
exceptions,  restrictions  are  imposed  similar  to  those  imposed  upon  state  banks. 


SAVINGS    BANKS  13 

Bankers  and  Brokers.  Bankers  and  brokers  usually  buy  and  sell  stocks  and 
bonds  for  their  customers,  and  in  addition  to  this  carry  on  a  general  banking  business, 
receiving  deposits,  paying  sight  drafts,  checks,  etc.  .  The}'  often  permit  their  customers 
to  overdraw  their  accounts,  as  they  have  for  safe  keeping  the  customers'  stocks  and 
bonds,  and  such  securities  are  ample  protection  for  overdrafts  to  a  certain  amount. 

SAVINGS    BANKS 

Purpose.  A  savings  bank,  as  its  name  implies,  is  an  institution  organized  for  the 
purpose  of  encouraging  economy  and  caring  for  the  savings  of  the  people.  The  deposits 
are  not  subject  to  check,  as  in  other  banks,  and  the  depositor  may  be  required  to  give 
thirty  days'  notice  when  he  wishes  to  withdraw  his  funds. 

How  Organized.  Savings  banks  are  organized  under  the  statutes  of  the  different 
states  by  a  number  of  persons,  usually  more  than  ten,  who  make  application  in  due 
form  for  the  privilege  of  organizing  such  a  bank.  These  associations  are  mutual. 
They  have  no  capital  like  a  state,  national,  or  private  bank,  their  available  funds 
consisting  of  the  money  put  into  the  bank  by  the  depositors.  Every  one  who  puts 
in  money  is  practically  an  owner,  and  the  profits  are  divided  among  the  depositors 
in  proportion  to  the  amount  that  each  has  to  his  credit. 

Investments.  As  safety  is  considered  paramount  to  profit,  the  law  prescribes  the 
character  of  the  investments  of  the  savings  institutions.  The  investments  which  are 
usually  permitted  are  loans  on  pledges  of  the  stocks  and  bonds,  investments  in  stocks 
and  bonds,  and  mortgage  loans.  The  stocks  and  bonds  in  which  savings  banks  may 
invest  are  generally  prescribed  by  the  law.  In  some  states  they  are  allowed  to  invest 
only  in  United  States  government  bonds  and  bonds  of  their  state. 

Interest.  Interest  is  usually  allowed  depositors  semiannually  on  the  first  day  of  July 
and  the  first  day  of  January  of  each  year.  The  current  rate  is  at  present  wavering  between 
$%  and  \°Jo.     If  the  interest  is  not  withdrawn  it  draws  interest  the  same  as  a  deposit. 

Difference  between  Savings  Banks  and  State  and  National  Banks.  Savings 
banks  not  only  provide  a  place  for  the  safe  keeping  of  money,  but  undertake  to 
invest  judiciously  the  money  received  on  deposit.  State  and  national  banks  provide 
a  place  for  the  safe  keeping  of  money  and  securities,  afford  a  depositor  a  convenient 
means  of  making  payment  by  check,  make  collections  for  him,  discount  his  paper,  etc., 
but  do  not  undertake  to  invest  his  deposits  for  him.  Savings  banks  open  their  doors 
to  savers,  to  those  who  wish  to  lay  by  a  small  amount  of  money  from  time  to  time. 
State  and  national  banks  open  their  doors  mainly  to  business  men. 

LOAN    AND    TRUST    COMPANIES 

How  Organized.  Loan  and  trust  companies  are  organized  by  a  number  of  persons, 
usually  ten  or  more,  under  the  laws  of  the  various  states. 

Kinds  of  Business  Transacted.  These  companies  receive  deposits  and  make 
loans,  luit  as  a  rule  they  do  not  undertake  the  collection  of  commercial  paper.  They 
act  as  agents  for  corporations  in  transferring  stocks  and  bonds,  make  investments, 
collect  interest,  act  as  trustees,  receivers,  executors,  administrators,  etc.     Many  com- 


14  MODERN    ILLUSTRATIVE    BANKING 

panics  have  boxes  in  fire  and  burglar  proof  safes  which  they  rent  to  customers  who 
desire  a  safe  place  for  the  keeping  of  valuable  papers,  etc. ;  others  make  a  business  of 
examining  and  insuring  titles  to  real  estate.  This  latter  practice  has  grown  quite 
extensively  within  recent  years. 

BANK    OFFICERS    AND    CLERKS 

The  officers  and  clerks  of  a  bank  are  generally  president,  vice  president,  cashier, 
receiving  teller,  paying  teller,  note  teller,  general  bookkeeper,  individual  bookkeeper, 
discount  clerk,  mail  clerk,  collection  clerk,  messenger,  and  porter,  together  with  the 
necessary  assistants  in  the  various  departments. 

President.  The  president  is  the  chief  executive  officer  of  the  bank.  He  presides 
at  the  meetings  of  the  board  of  directors,  and  generally  exercises  the  authority  of  the 
board  during  its  recess.  Some  banks  have  a  vice  president,  who  assumes  the  functions  of 
the  president  during  the  latter's  absence.  The  circulating  notes  and  certificates  of  stock 
are  signed  by  the  president,  or  the  vice  president,  and  the  cashier.  It  is  also  customary 
for  the  president  to  sign  the  minutes  of  all  business  meetings.  The  receipts  for  circu- 
lating notes  received  from  the  Comptroller  of  the  Currency  are  signed  by  the  president 
or  the  cashier.  In  some  banks  the  president  attends  to  making  the  larger  portion  of 
the  loans,  and  devotes  his  full  time  to  the  bank's  interests.  In  such  cases  he  is  paid  a 
regular  salary ;  but  when  he  devotes  only  a  small  portion  of  his  time  to  the  bank's 
interests,  the  position  is  frequently  considered  honorary,  and  no  salary  is  paid. 

Cashier.  Unless  there  is  a  vice  president,  the  cashier  ranks  next  to  the  president, 
and  is  in  reality  the  manager  of  the  bank.  He  has  authority  to  pay  out  the  bank's 
funds,  and  to  borrow  money  in  the  name  of  the  bank.  He  may  also  indorse  the  bank's 
paper  for  the  purpose  of  securing  loans.  He  is  appointed  by  the  board  of  directors, 
and  is  required  to  furnish  bonds  for  the  faithful  performance  of  his  duties.  He  keeps 
a  record  of  the  meetings  of  the  board  of  directors,  for  whom  he  is  the  acting  secretary. 
The  certificates  of  stock  issued  to  shareholders  are  signed  by  him  as  well  as  b}^  the 
president,  as  are  also  the  circulating  notes.  He  signs  all  drafts  drawn  on  other  banks, 
and  indorses  personally,  or  by  deputy,  all  drafts  and  notes  sent  away  for  collection. 
All  notes  and  drafts  received  from  other  banks  are  indorsed  to  him.  He  has  charge  of 
the  internal  workings  of  the  bank  and  supervision  of  the  clerical  force. 

The  Tellers.  The  paying  teller  usually  pays  out  all  moneys,  issues  certificates  of 
deposit,  certifies  all  checks  that  are  to  be  certified,  and  has  charge  of  that  part  of  the 
vault  containing  the  working  cash  of  the  bank. 

The  receiving  teller  usually  receives  all  the  money  coming  into  the  bank,  makes  the 
records  therefor,  and  at  night  turns  over  to  the  paying  teller  all  money  received  during 
the  day. 

The  wrork  of  the  note  teller  varies  in  different  banks. 

The  varying  duties  of,  and  the  necessary  qualifications  for,  the  tellers  and  clerks  are  fully  and  clearly 
explained  in  subsequent  chapters. 


BANKING    CUSTOMS 


15 


The  Bookkeepers.  The  bookkeepers  in  a  bank  are  known  as  the  general  book- 
keeper and  the  individual  bookkeeper.  The  general  bookkeeper  has  charge  of  the 
general  ledger.  The  individual  bookkeeper  has  charge  of  the  individual  or  deposi- 
tors' ledger. 

BANKING    CUSTOMS 

Collection  and  Exchange.  It  is  customary  for  most  banks  to  charge  their  deposi- 
tors a  small  fee,  generally  about  j^fo,  for  collecting  checks  on  out-of-town  banks. 
The  amount  so  charged  may  be  deducted  from  the  deposit  or  it  may  be  paid  in  cash. 
The  former  is  the  customary  way. 

A  small  fee  ranging  from  j^fo  to  ^l/o  is  generally  charged  on  discounted  paper 
which  is  payable  out  of  town.  Sometimes  an  additional  amount  is  charged  for  the 
interest  for  the  length  of  time  necessary  for  the  transmission  of  the  money ;  e.g.  if  a 
note  payable  in  Chicago  30  days  after  date  were  discounted  in  New  York  city,  the 
New  York  bank  might  charge  interest  for  33  days,  the  extra  three  days  being  allowed 
for  the  transmission  of  the  money.  In  addition  to  this  there  might  be  a  fee  for  collec- 
tion. This  practice  is  controlled  largely  by  the  size  of  the  customer's  account  and  the 
Sfeneral  custom  of  banks  in  the  different  cities. 

Banks  have  various  agreements  with  one  another  for  collecting  paper.  In  some 
instances  the  collecting  bank  agrees  to  remit  once  a  week  on  a  certain  day  without  any 
charge,  the  use  of  the  money  being  considered  equivalent  to  the  services  rendered  in 
collecting.  Others  make  no  charge  on  cash  items  but  charge  from  j^fo  to  ^<fo  on  all 
time  items.  Some  banks  have  no  fixed  rate,  but  make  such  arbitrary  charges  as  the 
circumstances  and  conditions  seem  to  warrant. 

Devices  for  Preventing  Check  Raising-.     Many  plans  have  been  devised  to  prevent 

the  raising  of  checks  and  bank  drafts,  but  so  far  nothing  that  has  been  tried  is  entirely 

effective.     There  is  no  question,  however,  that  the  use  of  some  of  the  many  devices 

offered  will  materially  decrease   the  losses  arising  from  this  source,  and  make  the 

raising  of  a  check  or  a  draft  very  difficult.     The  method  in  most  general  use  consists 

in  cutting  the  amount  of  the  dollars  in  the  check  with  a  machine  designed  for  this 

purpose,  thus : 

Form  of  Punched  Check 


AY  TO  THE. 

Order  of 


MeDlKA,)lY* 


'^^7^<>y  2-&, 


-6^?^^?^^ 


JL 


£i-  fb. 


:^^^-*-^y^^  ^^. 


\  rz-rv. 


\<Z2. 


tow 


J^^^^^^Sr^^^JL^i 


16 


MODERN   ILLUSTRATIVE   BANKING 


Another  common  practice  is  the  use  of  the  perforating  machine.  After  writing  the 
check  it  is  passed  through  the  machine  which  perforates  the  amount  as  illustrated 
below : 

Form  of  Perforated  Check 


A  method  of  recent  invention,  which  is  very  highly  indorsed  by  bankers,  consists 
in  passing  the  check  through  a  machine  which  prints  in  the  fiber  of  the  paper  with 
indelible  ink  a  certain  amount,  over  which  the  check  will  not  be  honored.  By  this 
process,  the  words  are  embossed  on  the  paper  in  such  a  manner  that  their  alteration 
would  be  practically  impossible  without  destroying  and  making  over  a  material  portion 
of  the  body  of  the  instrument.  The  following  represents  a  check  treated  as  above 
described : 

Form  of  Embossed  Check 


J\fr.  £2-/. 


>*a 


^/T^?^yjL^j, 


When  the  amount  is  small,  a  very  good  method  is  to  write  the  name  on  a  line  with 
it,  as  shown  on  the  following  page. 


BANKING   CUSTOMS 


17 


Another  Form  of  Safety  Check 


J>f&JS  NAT'  B.W  7/;')' 

.W.*EM3li3N  i  if.    I 

.::  :*■  H5  /  i 


orth^stPennf  ^L 


l&^/P- 


^wj^mzmKW^ 


/  to  the  orde 


l^L^. 


t£e 


r*£^^h& 


.dollars 


The  use  of  stubs,  or  coupons,  on  the  end  of  the  check,  has  met  with  much  favor  by 
express  companies  and  others.     The  following  form  represents  such  a  check  : 

Form  of  Stub  Check 


Farmers  and  TOecljamcs  Bank, 


22 


<^^ff 


7^r?^^*d^^^^<^ZS^y-£^7, 


7 


V  0  * 


^L  WMtv 


AMOUNT   NOT  TO   EXCEED  THAT    EXPRESSED   IN   WORDS 
AND   FIGURES  AT    LEFT 


jOlO^CQ.r-  <D  \f>  <r  <<>  c&  -V- 


7^T^. 


'mi   u    •*''•  ;*(<kcc  j.'»j» 'i-i.it  ,i-t  * ■ 


If,  in  addition  to  some  of  the  foregoing  methods,  banks  should  adopt  the  use  of  water-marked  paper, 
placing  a  limit  on  the  draft,  the  check  raiser  would  be  confronted  with  practically  insurmountable 
difficulties.  At  the  time  of  manufacture  the  paper  should  be  water-marked  "Limit  $500,"  or  "  Limit 
$100,"  as  the  case  might  lie,  and  still  further  design  should  be  worked  all  through  the  paper  so  as  to 
render  successful  cutting  and  patching  impossible. 

From  85%  to  95%  of  the  drafts  which  the  majority  of  banks  sell  are  for  amounts  under  $500.  A 
bank  might  have  its  drafts  marked  in  five  sets:  $100,  $200,  $300,  $500,  $1000.  The  chief  protection  from 
forgery  of  the  notes  of  the  Hank  of  England  lies  in  the  paper  used,  and  we  believe  that  an  absolutely 
effectual  method  of  preventing  the  raising  of  bank  drafts  must  be  sought  for  beneath  the  surface  of  the 
paper. 

Stopping  Payment  of  Checks.  A  check  is  simplv  a  written  order  on  the  bank, 
by  a  depositor,  for  a  certain  sum  of  money,  which  may  be  revoked  at  any  time  before 
the  bank'  has  made  payment  or  certification.  An  order  to  stop  payment  on  a  check 
should  be  in  writing,  and  should  relate  all  the  particulars  of  the  check.  Some  banks 
have  a  form  for  the  use  of  depositors  to  be  tilled  out  whenever  they  wish  to  stop  pay- 


B  wkivi; 


18 


MODERN    ILLUSTRATIVE   BANKING 


ment  on  a  check.  As  soon  as  a  notice  stopping  payment  is  received  it  is  banded  to  the 
paying  teller,  who  puts  his  initials  on  it  and  turns  it  over  to  the  bookkeeper,  who  makes 
a  record  of  the  fact.  When  checks  come  in  from  the  clearing  house,  the  entire  list  is 
carefully  examined  to  see  that  no  stopped  checks  are  among  them.  If  for  any  reason 
a  depositor  who  stops  payment  on  a  check  wishes  to  draw  a  duplicate,  the  bank  should 
be  so  notified,  and  the  word  "duplicate  "  should  be  written  across  the  face  of  the  check. 
The  following  is  a  very  good  form  of  notice  to  use  when  it  is  desired  to  stop  payment, 
on  a  check  for  which  a  duplicate  has  been  issued  : 

Form  of  Notice  to  Stop  Payment 


Albion,   N.Y.,  June  20,    19— 

Citizens   National    Bank. 

Gentlemen  :  — 

Please  take 

notice 

that    1    h 

ave   this    day   issued    duplicate   of 

my 

check    No.  625,    datec 

June 

14,    19—, 

payable   to   the   order   of    Smith 

Mfg. 

Co.,  for  $314.00. 

You  are   instructed 

to    refu 

se    payment   on   the   original   of  the   above 

described  check. 

Very  respectfully 

yours, 

-~-^^^c^y^^^^t 

Duplicate  checks  should  bear  the  same  date  as  the  notice  which  is  sent  to  the  bank. 
This  prevents  dishonest  persons  from  writing  the  word  "duplicate"'  across  the  face  of 
a  check  on  which  payment  has  been  stopped,  and  getting  it  cashed.  The  following  is 
a  form  of  a  duplicate  check  :  0 

Form  of  Duplicate  Check 


■jfir&v- 


CITIZENS  NATIOIVVI/BANK 

■-■'■''  ''";■'■  ■  -~>v;'  ' 


Mb.JL2tJZ- 


c^L- 


BANKING    CUSTOMS 


19 


Canceling  Checks.  When  a  bank  pays  cheeks  drawn  upon  itself,  they  should  be 
canceled  in  some  manner  by  the  paying  teller  before  they  are  passed  to  the  bookkeeper. 
The  cancellation  may  be  accomplished  by  placing  the  checks  on  spindles,  or  by  the  use 
of  punches  which  cut  in  the  checks  the  initial  of  the  person  who  cancels  them,  or  by  the 
use  of  a  rubber  stamp  which  marks  the  word  "Paid"  and  the  date  of  payment  thereon. 

When  a  bank  has  sufficient  time,  one  of  the  safest  plans  is  for  the  paying  teller  to 

mark  the  check  with  a  rubber  stamp  before  passing  it  to  the  bookkeeper.     After  it  is 

entered  by  the  individual  bookkeeper  he  should  also  mark  it  by  cutting  the  word  "Paid" 

through  the  check  with  a  machine  provided  for  this  purpose.     The  following  represents 

a  check  so  treated  : 

Form  of  Canceled  Check 


Ah.  2  ^,3 


, $L 

o  °  °  -^Mjc  T>\ 


uJ#y;fcMyy/c/'t/efy 


cT^ 


1L  y> 


Whatever  method  is  employed,  it  should  be  one  which  will  not  materially  disfigure 
the  check,  as  it  is  frequently  a  voucher,  and  as  such  is  valuable  evidence  in  a  lawsuit. 

Forged  and  Raised  Checks.  If  a  bank  pays  a  forged  check,  the  loss  invariably 
falls  on  the  bank,  as  it  is  supposed  to  be  familiar  with  the  signatures  of  its  depositors. 
If  a  raised  check  is  cashed,  the  loss  falls  upon  the  person  or  the  bank  that  innocently 
cashed  it,  provided  ordinary  prudence  has  been  exercised  by  the  drawer  in  filling  it  out. 

Tt  is  generally  held  that  if  the  drawer  of  a  check  leaves  a  blank  which  has  been  so  skillfully  filled  up 
as  to  give  no  evidence  of  alteration,  he  may  be  found  guilty  of  such  negligence  as  will'  make  liini  liable 
to  a  bona  fide  holder  for  the  apparent  amount  of  the  indebtedness.  (See  Thomas  on  Law  of  Negligence, 
p.  105.) 

If  a  raised  check  were  cashed  by  a  bank  under  these  circumstances,  the  loss  would,  in  most  states, 
fall  on  the  drawer.  There  are  some  conflicting  decisions,  however.  To  relieve  himself  from  any  charge 
of  negligence,  the  drawer  of  a  check  is  simply  required  to  commence  writing  at  the  extreme  left-hand 
end  of  the  blank,  and  fill  up  the  space  (if  any)  at  the  right  of  the  written  amount  with  a  line  made  by 
his  pen.  The  law  does  noi  require  him  to  use  any  of  the  devices  offered  for  preventing  checks  from 
being  raised,  although  prudence  would,  in  many  cases,  dictate  such  a  course. 

Method  of  Writing  up  the  Bank  Book.  The  custom  in  regard  to  writing  up  this 
book  varies.  At  the  present  time  a  method  frequently  employed  consists  in  entering 
the  deposits  on  the  left-hand  pages  and  the  checks  on  the  right,  without  giving  the 
dates  of  the  checks. 


20 


MODERN    ILLUSTRATIVE   BANKING 


Many  banks  enter  the  checks  in  detail,  giving  the  date  of  each  in  the  order  in  which  it  was 
drawn,  while  others  enter  only  the  total,  the  detailed  list  being  given  (without  the  dates)  on  a  separate 
slip  of  paper,  or  on  the  envelope  in  which  the  checks  are  returned.  The  method  of  writing  a  detailed 
list  of  checks  on  separate  sheets  of  paper  has  many  advantages  for  the  bank.  These  slips  may  be  filled 
out  by  the  use  of  the  registering  or  adding  machine,  which  saves  much  time,  and  insures  accuracy.  They 
may  also  be  written  up  at  such  times  as  may  be  convenient  for  the  bank  clerk,  so  that  when  a  depositor 
presents  his  book  to  be  balanced,  the  checks  are  practically  all  written  up,  and  the  book  may  be  returned 
on  very  short  notice.  The  depositor,  however,  is  liable  to  lose  these  detached  slips,  and  from  his  stand- 
point such  practice  is  objectionable.  Many  banks  have  avoided  the  undesirable  feature  of  this  method 
by  having  bank  books  made  with  alternate  short  leaves.  Checks  are  itemized  on  the  loose  slips,  and 
these  slips  are  pasted  on  the  short  leaves  of  the  bank  book.  This  method  is  perhaps  the  best  that  has 
yet  been  devised,  although  it  has  not  so  far  come  into  general  use. 

The  following  represents  a  bank  book  so  written  up : 

Form  of  Bank  Pass  Book 
Dr.  THE  FIRST  NATIONAL  BANK, 


In  Account  with 


v- 


i^z^y 


7 


x*  S.yG.-rf, 


2.S 


/ 


h£^f 


/  C?t?l? 

/  0? 


/  fjrzj- 


v 


-^bz^zsrz^Z--  Aff/'fa" 


Protesting.  When  a  note  or  draft,  formally  presented  for  payment,  is  not  paid  at 
maturity,  it  should  be  protested.  This  is  usually  done  by  a  notary  public,  who  sends 
or  delivers  a  formal  notice  to  the  indorsers,  declaring  that  the  note  has  been  presented 
for  payment,  and  that  such  has  been  refused.  It  is  unnecessary  to  protest  paper  on 
which  there  are  no  indorsers,  though  many  banks  protest  all  paper  that  is  not  paid 
when  due,  unless  there  are  specific  instructions  to  the  contrary.  When  paper  is  pro- 
tested, this  fact  is  noted  on  the  face  or  back  thereof,  usually  in  red  ink. 


BANKING   CUSTOMS 


21 


Form  of  Protested  Note 


/'  / 


yw. 


^va^s'.a^»^A^svas»s»s*^»yA^-A«s^»^*tt»v»yB^^^^»!^5^^s^»^B^^g^g^s^g^5K'■H^^^^^^.■^g^g 


gggSJ  I 


gssw-sygs 


Form  of  Protest 


Certificate  of  Protest. 

United  States  of  America,  ) 
State  of  Louisiana.  i 

I,  T.HE  UNDERSIGNED,  one  of  the  Notaries  Public  In  and  for  Orleans  County,  Do  1bereb£ 
•  CCCtifg,  that  on  the  date  below  written,  I  did  present  the  obligation  which  is  hereunto  annexed,  at  the 
place  where  it  is  payable  and  demanded  payment  thereof,  which  was  refused. 

TlfllberCUpon,  I.the  said  Notary,  did  PROTEST,  and  by  these  Presents  do  publicly  and 
solemnly  Protest,  as  well  against  the  Maker  and  Indorsers  of  the  same  as  against  all  others  whom  It 
may  concern,  for  Exchange,  and  all  Costs,  Damages,  and  Interest,  already  Incurred  or  to  be  hereafter 
incurred,  for  the  want  of  payment. 

Bttb  "B  DO  JfUttber  Ccrttfp,  that  on  the  same  day  and  year  below  written,  due  notice  of  the 
foregoing  Protest — by  notice  partly  printed  and  partly  written,  signed  by  me — was  given  to  the  several 
Indorsers  thereon  by  depositing  notices  in  the  Post  Office  at  New  Orleans,  I*a.,  postage  paid, 
directed  as  follows : 


^AJL^M^.  /^ifav^A^r  %^(%JL<?^^ 


'^Az-f,^-, "-^OkT^^O^v^yc?^/ 


each  of  the  above  named  places  being  the  reputed  place  of  residence  of  the  person  to  whom  the  notice  was 
directed,  and  the  post  office  nearest  thereto. 

In  CcattmonB  TObCreof.  I  have  hereunto  set  my  hand  and  affixed.my  seal  of  office. 
CblS  ©one  anO  proteetet),  In  the  City  of  New  Orleans.  La. 


(/a^M'f- 


[SEAL.] 


7A^} 


Notary  Pal-Hc. 


22 


MODERN    ILLUSTRATIVE    BANKING 


If  the  indorser  wishes  to  be  assured  of  receiving  notice  of  protest,  he  should  place  his  full  address 
below  his  name  when  indorsing  paper.  If  he  fails  to  do  this,  the  bank  should,  if  possible,  obtain  his 
address  and  write  it  on  the  paper  at  the  time  it  is  discounted.  Banks  are  required  to  exercise  reasonable 
care  in  ascertaining  the  addresses  of  indorsers ;  and  if  the  address  is  given  on  the  paper,  the  bank  is 
bound  to  respect  it  in  sending  out  notices  of  protest. 

Form  op  Notice  of  Protest  to  be  sent  to  Indorsers 


Traders  National  Bank 


New  Orleans.  La., 


'2-tf,  //■ 


Take  notice  that  a  note  made  by 


Y^^^-TC^^F^?^^— 


On 


for  ft  rf*^/7  , 


Z-- 


Dated- 


^^C- 


£^^L£. 


2-<7, 


Zf, 


.payable 


7^^^^^<^^9^^Z/?^L 


after  date, 


Bank, 


and  indorsed  by  you,  was  this  day  PROTESTED  for  non-payment, 
and  that  the  holders  look  to  you  for  the  payment  thereof  ,  payment 
having  been  demanded  and  refised. 

Yours  respectfully, 

HENRY  L.   HURDLE, 
Notary  Public. 


NOTIFY  YOUR   PRIOR   INDORSER. 


Notice  of  Protest.     Notice  of  protest  must  include  the  following: 
(1)    Such  a  description  of  the  paper  as  will  leave  no  doubt  in  the  mind  of  the 
ind  orser  as  to  which  note  has  been  protested. 


BANKING   CUSTOMS 


23 


(2)  A  statement  to  the  effect  that  the  note  was  presented  for  payment,  and  that 
payment  was  refused. 

(3)  A  statement  to  the  effect  that  the  holder  looks  to  the  indorser  for  payment 
and  indemnity. 

No  Protest.  When  the  drawer  of  a  draft  does  not  wish  to  have  it  protested  if 
payment  is  refused  by  the  drawee,  he  usually  writes  the  words  "No  Protest"  on  a  slip 
of  paper,  and  pins  this  slip  to  the  draft.  Many  drafts  are  printed  with  the  words 
"  No  Protest "  on  the  end  of  the  draft,  the  draft  being  perforated  so  that  these  words 
may  be  detached  easily. 

When  a  bank  receives  such  a  draft  for  collection,  the  stub  containing  the  words  "  No  Protest "  should 
be  detached  immediately  before  the  draft  is  presented  to  the  drawee  for  payment,  as  the  drawee  would 
not  be  so  likely  to  honor  a  draft  that  he  knew  was  drawn  uot  subject  to  protest. 

♦■ 

Form  of  Draft  with  "No  Protest"  Attached 


o  ! 

z 

1- 

z 

Ui 

w 

u 

cc 

H 

a. 

w 

u 

O 

cc 
a. 

a. 
o 
u. 
u 

o 

m 

z 

b. 

k- 

o  1 

W 

X 

*" 

u 

3 

P  ; 

fij/sA//&-     (jL^^Lsl^s^j^/ 


-i^^^7- 


^/W^^- 


•*kzL.2,s.(y\3£i 


/^s^z^7^>^/  }<cr^r7-7<^^6^^K^>/-s 


When  paper  is  protested,  it  is  generally  considered  as  notice  to  the  public  that  the  paver  or  drawee  is 
either  unable,  or  unwilling,  to  pay  his  debts,  and  for  this  reason  many  persons  who  would  lake  no  notice 
of  an  ordinary  statement  of  account  and  request  to  remit  will  pay  a  draft  which  is  drawn,  or  which  they 
believe  is  drawn,  subject  to  protest. 

Notary  Fees.  Nearly  all  banks  have  their  own  notary,  that  is,  some  officer  of  the 
bank  who  has  qualified  as  a  notary  public.  In  many  banks  this  official  receives  all 
protest  fees,  which  not  infrequently  amount  to  several  thousand  dollars  a  year.  The 
notarial  work  is  usually  given  to  the  cashier,  or  to  some  other  faithful  official  of  the 
bank,  in  appreciation  of  his  long  and  efficient  services,  and  the  fees  may  be  said  to  con- 
stitute one  of  the  perquisites  of  his  position.  In  some  cases,  especially  in  banks  new^y 
organized,  the  notary  fees  go  to  the  bank,  and  form  a  part  of  the  profits.  This  work 
contemplates  tin-  giving  of  the  notary  fees  to  one  of  the  bank's  officials.  An  account 
with  "  Notary  Fees"  should  be  opened  in  the  individual  ledger,  and  these  fees  should 
be  credited  to  this  account.  At  the  end  of  each  quarter,  or  more  frequently  if  desired, 
the  notary  may  draw  tin-  Ices  due  him  by  check. 


PART   II.     BANK   ACCOUNTING   (With   Vouchers) 


BOOKS   USED 

The  books  generally  used  in  a  bank  are  the  general  balance  ledger,  individual  ledger, 
general  cash  book,  discount  register,  collection  register,  discount  tickler,  collection 

GENERAL 


:l/*=Jtz^>gz^Zsc-£/ 


/ 

/ 


iS 


K^^L~£^ZZ>ZZ^S 


^^■^-z^c^z^z^c^^ 


sOZZ-^l^Z^  0-7-ZS- 


/  /  fat 


GENERAL 


■3  /  /a 


±  ff/J-£  ?j~ 


/fj#i* 


^■/  <P/?ff^ 


3^6  02  if 


A 


4- 


WHO! 

Discounted.  No. 


77=^ 


DISCOUNT 


INDORSER  Avn  COLLATERAL 


WHERE   PAYABLE. 


'Z0J/6 


,//7 


4?//" 


^/z^J^^-^TTKf. 


C^ocy 


v/f 


~-^Q^j^^y^O-u^>nj^ 


"c^JuXl 


&2£> 


^.2f€ 


14 


BOOKS   USED 


25 


tickler,  remittance  register,  draft  book,  certified  check  book,  certificate  of  deposit  book, 
and  cashier's  check  book. 

In  addition  to  the  above,  many  banks  use  a  discount  ledger,  customers'  bill  book,  foreign  register, 
offering  book,  paying  teller's  book,  receiving  teller's  book,  and  statement  book.  The  books  and  system  of 
banking  herein  presented  are  intended  for  medium  sized  bank^. 


CASH  BOOK 


'7-'/- 


GENERAL. 


TOTAL. 


"?. 


■^^y^^yt^a^e^Ci^i 


2  /fff<K3    <P3  </-ft  \fj 


/Sfsf- 


«t-/ft?ff^ 


REGISTER 


Z  a 


V 


/*' 


Af 


'f 


to 


D»ti  or  NoTt 


CC/Us? 


Tn»-    „??„*.«. 


AMm  hi    of  [>t»lst  1MU 


Di»cou»t         Exck.bci. 


(I.uc) 


Z  0-J/m^J , 


6 


/Off 


* 


PlOCttM 

CllMTlO 


ff* 


Poii  Whom    Dikouvtu 


(fS&^fc^zw^/ 


*'Vt6W-£s. 


/f'sSetifjiS'  C 


/z<?<? 
7 &<?<? 


yj~6ff 

z  67 


f//    /  zJt  fr'fjy'  jf  «y#<£ 


C/Kr    'Ajf' 


6pjjf7 


26 


MODERN   ILLUSTRATIVE   BANKING 


DISCOUNT 


NO. 


PAYER. 


WHERE    PAYABLE 


TO  WHOM  SENT. 


-g^^al.Vtf.. 


#j£^£&ru*/£  lO^M^ 


Jf7 


y^z^> 


^ff-^^^^^^ 


%z*4^z^3r-^,  >^5T 


9  .siT*. 


yj££x#Cfya6&n« 


JS/ 


'<tn#~2sy 


/^iU^-^L^ 


•^wf^f-^4; 


General  Cash  Book.  On  the  left  side  of  this  book  are  entered  all  cash  on 
hand  at  the  commencement  of  the  business,  and  afterward  all  deposits  and  receipts  of 
cash  of  whatever  kind  or  character,  either  in  detail  or  in  total.  On  the  right  side 
are  entered  all  payments  on  Deposits  account,  and  the  amount  paid  for  notes  dis- 
counted, and  for  the  running  expenses  of  the  bank.  When  balanced,  the  difference 
between  the  two  sides  should  show  the  amount  of  cash  in  the  vaults  of  the  bank. 
This  balance  usually  consists  of  national  bank  notes,  treasury  notes,  silver  certificates, 
checks  on  other  banks,  specie,  and  cash  items  such  as  sight  drafts.  The  general  cash 
book  should  be  balanced  daily,  and  the  total  receipts  and  total  payments  entered 
in  the  general  balance  ledger.  The  Collection  and  Exchange  column  is  footed, 
and  the  amount  written  in  the  General  column.  The  items  in  the  General  columns 
are  posted  to  the  proper  accounts  in  the  general  balance  ledger. 

The  Discount  Register  is  a  book  of  original  entry  and  becomes  the  basis  for 
all  transactions  involving  bills  discounted.     It  contains  a  complete  record  of  all  paper 


BOOKS    USED 


27 


**,   19- 


TICKLER 


BY   WHOM    DISCOUNTED. 


Amount  to  IE  ,-uc-rv 

COLLECTED  t-HlH.il. 


BBMAE68. 


',  ^C-^, 


2-/. 


;   //- 


/  00  0  0 

r'^zs^  0 
z/  0  00 

J/JT0 

/  0^00 


jr^S/J-6  0 


£t>. 


ZZ,  10— 


>*r 


Z0  0  0  0 
/  74:00 

fO0  0 


discounted  by  the  bank.     This  record  is  made  at  the  time  the  paper  is  discounted. 

If  the  note  is  not  indorsed  by  anyone  other  than  the  discounter,  no  entry  need  be  made  in  the 
column  entitled  "  Indorser  and  Collateral." 

The  several  items  in  the  column  "Proceeds  Credited"  are  posted  to  the  individual 
ledger  to  the  credit  of  the  persons  whose  names  appear  in  the  column  "For  Whom 
Discounted."  The  footing  of  the  column  "Collection  and  Exchange"  is  entered  on 
the  debit  side  of  the  general  cash  book  and  posted  to  the  credit  of  Collection  and 
H.rrlmiKie  in  the  general  balance  ledger.  The  footing  of  the  column  "Interest 
and  Discount"  is  entered  on  the  debit  side  of  the  general  cash  book  and  posted  to 
the  credit  of  Interest  and  Discount.  The  footing  of  the  column  "Amount  of  Note" 
is  entered  on  the  credit  side  of  the  general  cash  book  and  posted  to  the  debit  of 
Bills  Discounted.  The  sum  of  the  footings  of  the  columns  "Interest  and  Discount," 
"Collection  and  Exchange""  and  "Proceeds  Credited"  should  equal  the  footing  of 
the  column  "Amount  of  Note." 


28 


MODERN   ILLUSTRATIVE    BANKING 


When  paper  is  discounted  for  persons  who  are  not  depositors,  or  persons  who  draw  in  cash  the  pro- 
ceeds of  the  notes  discounted,  it  is  customary  to  issue  either  a  sundry  discount  receipt  or  a  cashier's  check. 
The  receipt  or  check  is  given  by  the  discount  clerk  to  the  person  selling  the  paper.  The  check,  when 
given,  is  cashed  by  the  paying  teller  and  charged  to  the  proper  account  in  the  individual  ledger. 

Discount  Tickler.  This  book  is  designed  to  facilitate  the  collection  of  bills  dis- 
counted, by  recording  under  the  various  days  of  the  year,  the  notes  falling  due  on  such 
days.  All  notes  due  June  20  would  be  entered  under  date  of  June  20 ;  all  notes  due 
June  21  would  be  entered  under  date  of  June  21,  and  so  on.  By  this  means  the  dis- 
count clerk  can  ascertain  immediately  the  notes  to  be  collected  for  each  day  of  the 
entire  year.  The  notes  should  be  entered  first  in  the  discount  register,  after  which 
the  entries  should  be  transferred  to  the  tickler.  When  so  transferred,  a  check  mark 
should  be  placed  in  the  column  provided  therefor  in  the  register. 

At  the  close  of  each  day  the  several  items  to  be  charged  are  posted  to  the  debit  of 
the  proper  accounts,  as  shown  in  the  Remarks  column,  and  the  footing  of  the  tickler 
is  entered  on  the  left  side  of  the  general  cash  book  under  Bills  Discounted.  As  will 
be  observed,  the  discount  tickler  does  not  afford  such  a  complete  history  of  the  note  as 
is  given  in  the  discount  register.  If  at  any  time  it  is  necessary  to  have  more  detailed 
information,  reference  can  be  made  to  the  record  in  the  register,  which  may  be  quickly 
found  by  the  number  of  the  note  as  given  in  the  tickler. 

Either  red  or  black  ink  may  be  used  in  the  Remarks  column.  The  latter  is  more  convenient,  but 
many  banks  maintain  that  there  is  much  less  danger  of  omitting  a  note  if  the  former  is  used.  The 
student  should  use  red  ink  unless  differently  directed  by  his  teacher. 


COLLECTION 


WHRN    LEPT  NO. 


l^c^z^y. 


'2  0J0O 

Jo/ 


^J<5S^c^zZ^- 


■J.rj 


l^ZZ^C^€J2/ 


c 


^A^^.^^y^^A^^^Z^/  ^^ju/A- 


\  ^^^e^^^^^^i'T^y^4 


WHERE   PAYABLE. 


Sundays  and  Holidays.  Paper  falling  due  on  Sunday  or  a  legal  holiday  shoulc 
be  entered  under  the  first  business  day  following.  Should  a  note  fall  due  on  Sunday, 
and  the  Monday  following  be  a  legal  holiday,  the  note  would  be  payable  on  Tuesday. 
This  has  reference  to  the  student's  work  in  this  book.  The  statutes  of  the  different 
states  in  regard  to  ascertaining  the  due  date  of  commercial  paper  vary,  and  the  student 
is  referred  to  the  statutes  of  his  state  for  information  on  this  point.  Banks  usually 
use  calendars  having  all  holidays  printed  in  red  ink. 

In  leap  years  the  added  day,  or  February  29,  is  not  counted  in  some  states.  The  statutes  of  New 
Fork  provide  that  the  added  day  in  leap  years  must  not  be  considered  in  counting  time  on  notes, 
iudgments,  or  anything  of  this  nature.     Some  states  have  Supreme  Court  decisions  to  this  effect,  but 


BOOKS    USED 


29 


in  the  majority  of  states  this  question  has  never  been  raised.  In  the  state  of  New  York,  a  note  dated 
February  '20  (in  any  leap  year)  payable  ten  days  after  date,  would  fall  due  March  2,  and  not  March  1, 
as  would  be  the  case  if  the  added  day  for  the  leap  year  were  counted. 

Collection  Register.  This  book  should  contain  a  record  of  all  paper  received  for 
collection  from  customers  and  out-of-town  banks.  Nothing  is  written  in  the  column 
entitled  "  Indorser,"  unless  the  paper  is  indorsed  by  some  one  other  than  the  person  or 
firm  for  whom  it  is  collected.  The  column  entitled  "Amount  to  be  Collected"  should 
show  the  face  of  the  note,  plus  the  interest  accumulated.  Most  of  the  paper  left 
for  collection  will  not  have  accumulated  interest.  The  Check  column  is  used  when 
the  entries  on  the  collection  register  are  transferred  to  the  collection  tickler.  The 
Remarks  column  is  seldom  used.  When  paper  is  collected,  a  notation  to  this  effect  is 
made  in  the  collection  tickler. 

Collection  Tickler.  After  paper  received  for  collection  is  entered  in  the  collection 
register,  it  is  transferred  to  the  collection  tickler  under  the  date  on  which  it  falls  due. 
Usually  half  a  page  is  allowed  for  each  business  day  of  the  year.  The  collection 
tickler  should  be  examined  every  morning  to  ascertain  the  amount  of  paper  to  be 
collected  for  that  day,  and  when  such  paper  is  collected  or  returned,  a  notation  to  this 
effect  should  be  made  with  red  ink  in  the  column  provided  for  this  purpose.  The 
several  items  in  this  book  are  posted  to  the  proper  accounts  at  the  close  of  each  day. 

3Iethod  of  Handling-  Sight  Paper.  Checks  and  drafts  which  are  deposited  in  the 
bank  by  customers,  and  credited  to  them  at  the  time  of  the  deposit,  are  not  entered  in 

REGISTER 


D**n  o»  Norm. 


WHEN    DOE. 


FOR   WHOM   COLLECTED. 


J^z^^J^^S^^^^i^^^,^^. 


MARKS. 


Z/J^S> 


7?z6 V  o  / 


the  collection  register,  nor  in  the  tickler,  but  are  remitted  and  charged  to  the  banks 
on  which  they  are  drawn. 

Sight  paper  which  is  received  for  collection  from  depositors  and  others  should  be 
entered  in  the  collection  register  and  collection  tickler,  and,  if  payable  out  of  town,  it, 
should  In;  sent  away  for  collection.  The  bank,  or  banks,  to  which  it  is  sent  are  not 
charged  with  the  paper  until  the  collection  is  made  and  the  remitting  bank  has  been 
notified  of  such  collection.  Whether  or  not  sight  paper  should  be  entered  in  the 
collection  register  depends  entirely  on  whether  it  was  received  on  deposit  and  credited 
to  the  depositor  or  received  for  collection. 

Remittance   Register.     All    items    which    affect    our   accounts   with  other  banks 


30 


MODERN    ILLUSTRATIVE   BANKING 


COLLECTION 


WHERE    PAYABLE 


TO  WHOM   SENT 


<2^c^yp!Z^>, -Aj^ziZ^Zyi 


j/<r 


are  entered  in  this  book.  All  cash  items  remitted  to  other  banks  for  our  credit  should 
be  entered  in  detail  in  the  column  entitled  "  Items,"  and  their  sum  extended  into  the 
column  entitled  "  Debits."  All  bills  discounted  and  collections  charged  to  other  banks 
are  entered  in  the  Debits  column.  The  totals  of  all  remittances  received  from  other 
banks  and  all  notes  which  they  charge  to  us,  are  entered  in  the  Credits  column.  The 
several  items  in  the  columns  entitled  "  Debits  "  and  "  Credits  "  are  posted  to  the  proper 


REMITTANCE 


DATE  OP  CHECK. 


THERE    PAYABLE 


/a 
// 

/z 


(l^gi^r^^^g^z^^^ 


-ff-i^^y 


BOOKS    USED 


//, 


//- 


TICKLER 


POR   WHOM  COLLECTED 


Amount 
Collected 


Z/J  <S0 


REMARKS. 


?r*ij-i 


■^^yfZtz^r&tKiZ^ 


'A  //- 


/.— 


l^Z^Z&f 


zsyh-^ 


-%L 


accounts  in  the  general  balance  ledger.  At  the  close  of  the  day  the  footing  of  thje 
Debits  column  is  entered  on  the  credit  side  of  the  general  cash  book,  and  the  item 
checked  as  shown  in  the  model.  The  footing  of  the  Credits  column  is  entered  on  the 
debit  side  of  the  general  cash  book,  and  the  item  checked. 

Sight  Paper  remitted  for  Our  Credit.    Checks  and  sight  drafts  payable  out  of  town, 
which  are  deposited  in,  or  cashed  by,  our  bank  are  remitted  to  our  correspondents  as 

REGISTER 


EJCPLANATIOH 


BANK   TO   BE   DEBITED  OR   CREDITED 


DATE  OP  SHTRV 


cjKcS/ 


**=/#. 


*<&4sWz^sLJ 


/0£/Jl. 


/  fr£<t-£  /^ 


MODERN    ILLUSTRATIVE   BANKING 


cash  items.  At  the  time  of  the  remittance  they  are  charged  in  the  remittance  register 
to  the  bank  to  which  they  are  sent,  and  should  not  be  entered  in  the  collection  register. 

Sight  Paper  received  for  Credit  of  Others.  Checks  and  sight  drafts  which  are 
received  from  other  banks  to  be  credited  to  them  should  be  entered  in  the  remittance 
register  to  the  credit  of  the  bank  remitting  them. 

Distinction  hetween  Collection  and  Cash  Item.  If  a  check,  or  a  similar  item,  on 
an  out-of-town  bank  is  left  at  our  bank  for  collection,  it  should  be  turned  over  to  the 
collection  clerk,  who  will  enter  it  in  his  collection  register  and  collection  tickler,  and  send 
it  away  for  collection ;  but  if  a  check,  or  a  similar  item,  drawn  on  an  out-of-town  bank, 
is  deposited  in  our  bank,  it  becomes  a  cash  item,  and  should  be  entered  in  the  remittance 
register  and  charged  to  the  bank  upon  which  it  is  drawn.  The  disposition  of  a  check 
on  another  bank  depends  upon  the  answer  to  the  question,  "  Was  it  taken  for  collection, 
or  was  it  deposited  by,  and  credited  to,  one  of  our  customers  ?  " 

Certified  Check  Book.  This  book  contains  a  list  of  all  checks  that  have  been 
certified.     It  also  shows  those  that  have  been  paid,  together  with  the  date  of  payment. 

CERTIFIED  CHECK  BOOK 


~2s#;//— 


N*mi  ot  Drawer. 


For  Whom  Certified. 


Amount  of 
Check 


Amount  Paid. 


if 


r* 


#<?# 


tf/ 0S00 


c^3c^€^^5u/  f^^Z    ^-y, 


<=^^a^^-t^^c£Ji^-^^i^d^ 


700 


6000 


/000 


V2-/^00 


j^cc^T^d^-2.^    7-000 


C7^>&. 


OCc^, 


\*4 


/f 


77"* 
6006 

/00c 


Each  check  certified  is  debited  to  the  drawer  in  the  individual  ledger  and  the  total  of 
the  checks  certified  is  posted  to  the  credit  of  Checks  Certified  in  the  individual  ledger. 

From  this  book  the  number  of  certified  checks  outstanding  may  be  easily  determined. 

Draft  Book.  Bank  drafts  are  usually  bound  in  book  form.  These  books  are  very 
similar  to  an  ordinary  check  book,  bank  drafts  being  in  reality  checks  of  one  bank  on 
another  bank.  The  draft  book  is  provided  with  a  stub  similar  to  that  of  an  ordinary 
check  book.  On  this  stub  are  recorded  the  number  of  the  draft,  the  name  of  a  person 
in  whose  favor  it  is  drawn,  how  paid  for,  the  exchange  charged,  if  any,  and  the  face 
amount.  At  the  close  of  the  day  the  total  of  the  Face  of  Draft  column  is  transferred 
to  the  remittance  register  and  the  total  of  the  Collection  and  Exchange  column  to  the 
left  side  of  the  general  cash  book. 


BOOKS    USED 


33 


DRAFT  BOOK 


No.  ^f/f. 

Date   /^a^-^/^ 


TnjZOfL 


2^7^^?^ 


For  ~-&4 s^r^4>y 


Amount  - 


Exchange 


Face 


ZJ  Z^ff-f 


Zbe  (Quaker  Cits  IHational  Bank 

Philadelphia,  Pa.r  /VZ*,^  *£     t9#,i. 
Pay  to  the  order  of        (/-.  (J~~Co^z?^^^        $  £^,^x 


Sr^^/-rr?~%/^^w^^^^(^Zt?->^<y-. 


:  Dollars. 


To  the   FIRST   NATIONAL   BANK. 
New  York  City. 


r*Z=£2f£~jLJ£ 


Cashier. 


Certificate  of  Deposit  Book.  This  book  closely  resembles  an  ordinary  check  book. 
On  the  stub  of  the  certificate  of  deposit  book  are  recorded  the  number  of  each  certifi- 
cate, the  date  of  issue,  the  name  of  the  purchaser,  the  name  of  the  payee,  and  the 
amount. 

CERTIFICATE  OF  DEPOSIT  BOOK 


No.    / . 


Date   J/m^^.-r /&/?<■; 


Tn  0.*r?r~fasrJ?^fa^^/s 


•L^222^ 


Fnr  ^fr^^j^y^yjs 


Amount. 


/00C 


$  /  0  gar 


CERTIFICATE  OF  DEPOSIT    No.^ 

°— —  Rochester,  N.  Y., . 


.19  ^J. 


0.\r^r^^r^^^^^s/A^?-^?y has  deposited  in 


THE  FIRST  NATIONAL  BANK 

OF   ROCHESTER 


(  y^^^^^-*^<-*4^x?^?^ef    /se-. 


n^  Dollars. 


payable  to  the  order  ofz 


— ^ 


'^f^lT!  A. 


of  this  certificate  properly  indorsed. 


U^_ 


on  return 


THIS  DEPOSIT  NOT  SUBJECT 
TO  CHECK. 


i^Ct?^  ~j^/V--z^^>>^. 


Cashier. 


The  total  certificates  issued  during  the  day  is  posted  to  the  credit  of  Certificates  of 

Deposit*  in  the  individual  ledger. 

Cashier's  Check  Book.     A  cashier's  check  differs  from  a  depositor's  check  only  in 
that  it  is  signed  by  the  cashier  of  the  bank;  hence  a  cashier's  check  book  does  not 

CASHIER'S  CHECK  BOOK 


No.^u 


Date. 


To 

Amount 


7* 


u 

w 
X 
u 

in 

a: 


< 


No.-^ 


THE  FIRST  NATIONAL  BANK 

Rochester,  N.  Y.,  /^^  -*7     ; 
Pay  to  the  order  nfJ<^LA^f3£^/s  JL,  fpr<  <r- 

■<P^/>?s^<^^^--^^^^'yZ>-» *-  _  Dollars. 


'^yy-r,       19  #4^. 


»^-^ 


o/^>-f^i-^^?y 


Cashier. 


differ  from  a  depositor's  check  book.     The  sum  of  the  cashier's  checks  issued  during 
the  day  is  posted  to  the  credit  of  Cashier  s  %  in  the  individual  ledger. 


HANK  l\<. 


34  .  MODERN    ILLUSTRATIVE    BANKING 

Individual  Ledger.  The  individual  ledger  is  a  book  of  original  entry  for  all  trans- 
actions which  affect  the  accounts  of  depositors.  The  names  of  the  depositors  are  writ- 
ten in  alphabetical  order  in  this  book.  Sometimes  the  names  are  printed  in  when  the 
book  is  made,  and  a  few  blank  lines  are  left  after  each  letter  for  the  purpose  of  writing 
in  any  accounts  that  may  be  opened  later.  The  amount  of  space  left  for  each  depositor 
is  determined  by  the  individual  bookkeeper,  who  makes  up  his  estimate  from  the  busi- 
ness which  depositors  have  done  previously,  or,  in  the  case  of  a  new  depositor,  the 
estimate  is  made  upon  the  amount  of  business  likely  to  be  done.  In  some  banks  the 
leaves  following  the  first  record  of  names  are  cut  two  inches  narrower,  so  that  when  a 
leaf  on  the  right  is  turned  over  on  a  left-hand  page  the  names  are  not  covered  and  the 
record  may  be  continued  without  rewriting  the  names,  except  on  the  first  of  each 
month  or  each  three  months. 

At  the  close  of  banking  hours  the  columns  entitled  "  Checks  in  Detail,"  "  Total 
Checks,"  and  "  Deposits "  are  footed.  The  footings  of  Checks  in  Detail  and  Total 
Checks  columns  should  be  the  same. 

The  footing  of  Deposits  column  is  entered  on  the  left  side  of  the  general  cash  book, 
and  the  amount  posted  to  the  credit  of  Deposits  in  the  general  balance  ledger.  The 
footing  of  Total  Checks  column  is  entered  on  the  right  side  of  the  general  cash  book, 
and  the  amount  posted  to  the  debit  of  Deposits  in  the  general  balance  ledger. 

In  extending  balances,  each  customer's  deposit  is  added  to  his  balance  for  the  pre- 
vious day,  his  total  checks  deducted  from  this  sum,  and  the  new  balance  extended  into 
the  Balance  column. 

Whenever  an  account  is  overdrawn  the  balance  is  written  in  red  ink.  In  footing 
the  Balance  column  the  red  ink  amounts  must  be  omitted  and  their  sum  ascertained 
separately.  The  sum  of  the  red  ink  amounts  should  be  written  below  the  sum  of  the 
black  ink  balances,  and  in  proving,  the  red  ink  balances  must  be  subtracted  from  those 
written  in  black  ink. 

Add  the  footing  of  the  Deposits  column  to  the  footing  of  the  old  balance  column, 
and  from  their  sum  subtract  the  footing  of  the  Total  Checks  column  ;  the  remainder 
should  agree  with  the  footing  of  the  new  Balance  column.  If  there  are  red  ink  bal- 
ances, their  sum  should  be  subtracted  from  the  sum  of  the  black  ink  balances,  and  the 
net  amount  used  in  making  up  this  proof. 

The  letters  O.  K.  are  written  after  a  balance  when  the  bank  book  has  been  written 
up  and  verified. 

In  case  there  are  too  many  checks  for  the  space  provided  in  the  body  of  the  ledger, 
the  checks  may  be  listed  on  the  margin  of  the  ledger,  and  reference  made  thereto  by  a 
check  mark.  (See  amount  of  $2000.00  in  column  "  Checks  in  Detail,"  on  Friday,  after 
the  name  of  George  C.  Bain.)  The  list  of  the  checks  composing  this  item  is  written 
on  the  margin  of  the  ledger.  In  case  the  bookkeeper  should  find  it  necessary  to  list 
checks  on  the  margin  very  frequently,  different  characters  may  be  provided  for  refer- 
ence to  these  lists. 

General  Balance  Ledger.  This  book  should  contain  all  the  general  accounts  of 
the  bank.  Debit,  Credit,  and  Balance  columns  are  provided  for  each  business  day 
of  the  week.     The  debit  balances  are  written  in  red  ink  and  the  credit  balances  in 


34  a 


DAY,    JUNE   16,    190 


Total 
hecks. 


123 


700 

*J~£  S3 


f 

■>ZO 


7: 


c* 


Deposits. 


<f000 


JJ~0O 


Z000 


Z00 


SS 


71- 


27 


6#7& 


2&0f3 

* 


ZS\ 


2-07Z 

700O 

•J400 


V 

Cz. 


fO0 


■  i-jsC 


* 


dfriz? 


j-/ 


g£ 


/V 


'J- 


SATURDAY,    JUNE    17,    190 


Checks  in 
Detail. 


/S00 

V6 


J~0  o. 


/ 00O 


&S0 


j*vz£ 


J  J- 
Cz 


'7 

C  2- 
3~0 


z£ 


Total 
Checks. 


/J~00 


S^-J  frr 


2~S/¥ 
Z-//6 
'000 

CS0 


/  0  0 


f-V2& 


'7 

/  z 


z£ 


Deposits. 


6f/ 


/  /r^/ 


"79 


v-z 


Z00 


3  000 

tZoo 
■3  oo 
/  00 


Lgf  J£ 


7' 

3f\ 


/  / 


•j-v 


Balance. 


zfVao 
7^0 2 


3  23'. 


7f77 


* 

6  Z00 

C^00 

/00O 


7*' 


,/y  ;;  ■ 


* 


££JLgJLZd 


V 


4^ 


3~0 


2-3 


CO. 


NAME 


>x2^^^S%?JLt  lo,. 


<a/ 


'<^<Jz<4t>&z&ri£s 


INDIVIDUAL      LEDGER. 


34  a 


Tht  asterisks  indicate  red  ink. 


BOOKS   USED 


35 


black.  The  sum  of  the  red  ink  balances  should  at  all  times  equal  the  sum  of  the  black 
ink  balances.  To  the  up-to-date  banker  this  form  of  ledger  possesses  many  advantages 
over  the  old  form  of  mercantile  ledger.  The  balance  of  any  account  may  be  ascer- 
tained immediately,  the  bookkeeper  can  prepare  a  statement  of  the  bank's  condition  in 
a  few  minutes,  and  clerical  labor  is  reduced  to  the  minimum,  the  improved  form  requir- 
ing less  than  one  third  the  clerical  work  necessitated  by  the  old  method. 

GENERAL  BALANCE  LEDGER 


Mon-dat    June  19,  19— 

BALANCE. 

DEBITS. 

CREDITS. 

BALANCE. 

^/x&C&z£h^>tK^T^se>f 

<A/S00 

/37&£3~/ 

~&s4Zjd^Ls 

3  V. 

/¥<&£/ 

Zf    /  7/ 0/^333 

7<s 

^Ztct^y-^ti^-f^iy  7/-C7 \J£t^ez^c4*e^?~ 

y£fyj-/f 
//t?0t? 

/J3yj~ 

' 

• 

/A<rZ0 
/3 

20 

/3~*/0 

^Ttz^z^^d^ 

• 

2f^2/-/^t>^z^3 ■ -J^d^t^^S&c-i/. 

/IT0000 
/f0000 

ptS0006 
/f'0006 

Z£Uj&tKd<c<£ds' 

/JT/fV 

2/33~ 
/3~Z03tZt 

2</6zft 

*/3~0000 

ftCztt 

10 

23/2f/ 

f* 

7* 

2^632/ 
jr7 

/0 
•J-0 

/SSSf 

2/33 

/J\rf3f2 

zj~0/6> 
//s~0000 

J0///Z/ 

30 

0/ 

20 

\r0 

0/ 

* 

30JpZJ3 

/J     J'J-JSf/' 

_:J-         sJirJJT/ 

Sf 

36 


MODERN    ILLUSTRATIVE    BANKING 


The  auxiliary  books  used  in  the  organization  of  a  national  bank  are  practically 
the  same  as  those  used  in  the  organization  of  any  other  corporation  or  joint  stock 
company.     They  may  be  briefly  referred  to  as  follows : 

1.  The  subscription  book,  in  which  are  recorded  the  names  of  the  persons  subscribing 
for  stock,  together  with  the  number  of  shares  desired. 

2.  The  installment  book,  in  which  are  written  the  names  of  the  stockholders  and 
the  amount  paid  in  by  each. 

3.  The  minute  book,  in  which  is  written  a  full  account  of  the  meetings  of  the  stock- 
holders and  board  of  directors. 

4.  The  stock  certificate  book,  from  which  the  certificates  representing  shares  of  stock 
are  taken  and  in  which  the  stockholders  receipt  for  the  number  of  shares  issued  to  them. 

5.  The  transfer  book,  in  which  is  written  a  brief  history  of  the  old  certificates  can- 
celed and  the  new  ones  issued. 

6.  The  stock  ledger,  in  which  are  recorded  the  amount  of  the  capital  stock  of  the 
bank,  and  the  part  of  same  debited  and  credited  to  the  several  stockholders. 

7.  The  dividend  book,  in  which  are  written  the  name  of  each  stockholder,  the 
number  of  his  shares,  the  amount  of  his  dividend  at  each  dividend  period,  and  his 
signature  at  the  time  dividends  are  paid. 


CONDITION    OF   THE    FIRST    NATIONAL    BANK,    ROCHESTER, 

TO   BE   ENTERED    IN   THE    GENERAL    BALANCE    LEDGER 

The  general  balance  ledger  of  the  First  National  Bank,  Rochester,  N 
the  following  balances  of  accounts  at  the  close  of  business,  Saturday,  Dec. 


Debit  Balances 

Stocks  and  Bonds, 

Cash, 

U.  S.  Bonds  to  Secure  Cir. 

Furniture  and  Fixtures, 

Premium  on  U.  S.  Bonds, 

Bills  Discounted, 

Redemption  Fund  (5%  of  Cir.), 

Sundry  Expense, 

Protested  Paper, 

Chemical  Natl.  Bk.,  New  York,     50265.40 

National  Park  Bank,  New  York 

(approved  reserve  agent),  50420. 

Traders  Natl.  Bk.,  Buffalo,  N.Y.,    4221.16 
Coml.  Natl.  Bk.,  Troy,  N.Y.,  3418.41 

Farmers  Natl.  Bk.,  Phil.,  Pa.,        1242.31 
Central  Natl.  Bk.,  Oswego,  N.Y., 
Wayne  Co.  Natl.  Bk.,  Lyons,  N.Y.,  2014.50 

630143.84 


Credit  Balances 

25000.  Capital  Stock, 

317730.22  Circulation, 

75000.  Deposits, 

4200.  Undivided  Profits, 

3750.  Surplus  Fund, 

85290.  Collection  and  Exchange, 

3375.  Interest  and  Discount, 

4216.84  Dividends, 

Loss  and  Gain, 


N.Y. 


,Y.,  exhibits 
15,  19-. 

100000. 
67500. 
421562.50 
2132.63 
32750. 
1136.54 
5062.17 


630143.84 


CONDITION    OF    THE    FIRST    NATIONAL    BANK,    ROCHESTER,    N.Y.  61 

* 

Open  accounts  in  the  general  balance  ledger  with  the  foregoing  balances  in  the  order 
in  which  they  are  written  in  the  statement,  writing  the  debit  balances  first,  then  the 
credit  balances.  Place  the  balances  in  the  extreme  left-hand,  or  Balance,  column  of 
the  general  balance  ledger.  Write  all  debit  balances  in  red  ink  and  all  credit  balances 
in  black  ink.  Find  the  sum  of  the  debit  balances,  and  write  the  footing  in  red  ink  at 
the  bottom  of  the  column.  Find  the  sum  of  the  credit  balances,  and  write  the  footing  in 
black  ink  at  the  bottom  of  the  column.     (See  form  of  general  balance  ledger,  page  35.) 

TO  BE  ENTERED  IN  THE  INDIVIDUAL  LEDGER 

Ballantine  Bros.  &  Co.,  8754.12 

Beach,  C.  W.  &  Bros.,  9271.52 

Buffalo,  Rochester  &  Pittsburg  R.R.  Co.,  124008.73 

Black,  Adler  &  Co.,  38300. 

Curtis,  A.  B.  &  Co.,  27291.68 

Coit,  Moses  &  Co.,  5999.68 

Deville,  Chas.  M.,  19173.11 

Fidelity  Mfg.  Co.,  110215.70 

Keeled  Boynton  &  Co.,  9200. 

Lord  &  Taylor,  8692.15 

Martin  Bros.,  5926.70 

Miner,  Geo.  W.  &  Co.,  12531.72 

Wood,  Walter  H„  18215.75 

Washburn,  C.  W.,  20211.64 

Certified  Checks,  2000. 

Certificates  of  Deposit,  1200. 

Cashier's  Account,  500. 

Notary  Fees,  70. 

Enter  the  above  accounts  in  your  individual  ledger  (see  model,  page  34  a),  writing 
the  balances  in  the  extreme  left-hand,  or  Balance,  column.  Foot  the  column  at  the 
bottom  of  the  page. 

In  this  set  you  are  not  opening  the  books  of  a  bank,  but  are  merely  taking  charge  of  the  work 
of  a  bank  which  is  already  in  running  order.  The  balances  which  you  are  instructed  to  enter  in  your 
books  are  the  balances  of  the  accounts  as  shown  by  the  books  of  the  bank  at  the  time  you  take  charge  of 
the  work. 

TO   BE   ENTERED    IN   THE    DISCOUNT    TlCKLER 

Below  is  a  list  of  unpaid  bills  discounted  now  in  the  hands  of  out-of-town  banks  for 
collection.  This  paper  must  appear  in  the  discount  tickler  ;  therefore,  enter  it  in  the 
discount  tickler,  each  item  under  its  date  of  maturity.  Write  the  following  dates,  in 
the  order  given,  in  the  blank  spaces  of  the  discount  tickler  :  Dec.  17,  18,  19,  27,  31, 
Jan.  2,  5,  6,  7,  8.      (See  form  of  discount  tickler,  pages  26  and  27.) 

As  no  entry  is  made  in  the  discount  register  at  the  maturity  of  paper,  it  is  not  necessary  to  enter 
bills  discounted  on  hand  at  this  time  in  your  discount  register.  In  the  transactions  that  occur  in  the 
regular  daily  business  of  the  bank,  all  such  paper 'should  be  entered  in  both  the  discount  register  and 
the  discount  tickler. 


389084 


38  MODERN   ILLUSTRATIVE   BANKING 

No.  369.  Note  of  Benjamin  K.  Decker  for  $1500,  discounted  by  Geo.  W.  Miner 
&  Co.,  payable  at  Traders  National  Bank,  Buffalo,  2  months  from  Oct.  17.  Sent 
to  Traders  National  Bank,  Buffalo. 

This  note  is  payable  two  months  from  Oct.  17,  which  would  make  it  due  Dec.  17. 
Make  an  entry  in  the  discount  tickler  as  follows:  In  the  Number  column  write  369; 
under  "Payer,"  Benj.  K.  Decker;  under  "Where  Payable,"  Traders  Natl.,  Buffalo; 
under  "To  Whom  Sent,"  Traders  Natl.,  Buffalo;  under  "By  whom  Discounted," 
Geo.  W.  Miner  $  Co. ;  under  "  Amount  to  be  Collected,"  1500.00.  Do  not  write 
anything  in  the  Remarks  column. 

No.  300.  Note  of  Lord  &  Hawley,  discounted  by  Bennett  Bros.,  payable  at 
Farmers  National  Bank,  Batavia,  90  days  from  Sept.  18,  for  $2500.  Sent  to  Traders 
National  Bank,  Buffalo. 

In  finding  the  due  date  of  the  above  note,  count  90  days  (not  3  months)  from 
Sept.  18.  Ninety  days  from  Sept.  18  is  Dec.  17.  Make  an  entry  in  the  discount 
tickler  under  date  of  Dec.  17. 

No.  375.  Note  of  D.  W.  Smith  &  Co.,  discounted  by  the  Fidelity  Mfg.  Co.,  at  2 
months  from  Oct.  18,  payable  at  Briggs  National  Bank,  Clyde,  for  $ 7500.  Sent  to 
Wayne  Co.  National  Bank,  Lyons. 

Two  months  from  Oct.  18  is  Dec.  18.  Under  "  Dec.  18,"  in  the  second  blank  space 
of  the  discount  tickler,  make  an  entry  similar  to  those  for  preceding  numbers. 

No.  396.  Note  of  Billings  &  Hoyt,  discounted  by  L.  J.  Pratt  &  Co.,  at  30  days 
from  Nov.  18,  payable  at  Merchants  National  Bank,  Troy,  for  $6900.  Sent  to  Com- 
mercial National  Bank,  Troy. 

No.  378.  Note  of  Conway,  Miller  &  Morgan,  discounted  by  A.  B.  Curtis  &  Co., 
at  60  days  from  Oct.  19,  payable  at  Commercial  National  Bank,  Troy,  for  $5400. 
Sent  to  Commercial  National  Bank,  Troy. 

No.  399.  Note  of  J.  B.  Maxwell  &  Co.,  discounted  by  C.  W.  Washburn,  at  30  days 
from  Nov.  19,  payable  at  Newark  National  Bank,  Newark,  for  $3000.  Sent  to  Wayne 
Co.  National  Bank,  Lyons. 

No.  403.  Note  of  Smith,  Brown  &  Co.,  discounted  by  Fidelity  Mfg.  Co.,  at  1 
month  from  Nov.  19,  payable  at  Commercial  National  Bank,  Troy,  for  $1200.  Sent 
to  Commercial  National  Bank,  Troy. 

No.  421.  Note  of  Williams,  Hoyt  &  Co.,  discounted  by  Martin  Bros.,  at  30  days 
from  Nov.  27,  payable  at  Farmers  National  Bank,  Philadelphia,  for  $500.  Sent  to 
Farmers  National  Bank,  Philadelphia. 

No.  1.  In  your  package  entitled  "  Work  for  Student "  you  will  find  a  memorandum 
marked  "No.  1,"  to  correspond  with  the  number  of  this  transaction.  The  vouchers 
following,  marked  "  No.  1,"  constitute  all  of  the  discounted  paper  in  the  possession  of 
the  bank  at  this  time.     Be  sure  not  to  remove  any  of  the  other  vouchers. 

(a)  These  notes  should  be  entered  in  the  discount  tickler  in  the  order  of  dates  on 
which  they  fall  due.  The  dates  on  which  the  notes  fall  due  are  written  on  the  face 
and  back  of  the  note,  and  the  numbers  on  the  back.  Be  sure  to  enter  each  item  under 
its  date  of  maturity.     When  notes  are  payable  at  First  National  Bank,  Rochester,  N.  Y., 


CONDITION    OF   THE   FIRST   NATIONAL   BANK,    ROCHESTER,    N.Y.  39 

write  Our  Bank  in  the  column  entitled  "Where  Payable."    The  last  indorser  is  the  per 

son  by  whom  the  note  was  discounted.     Leave  the  "To  Whom  Sent"  column  blank. 

Notes  are  numbered  consecutively  in  the  discount  register,  the  number  of  eacli  note  being  assigned 
by  the  bank  first  discounting  it.  When  making  entries  in  the  discount  tickler  from  the  discount  register, 
the  numbers  assigned  the  notes  on  the  register  are  carried  to  the  tickler. 

(6)  After  you  have  entered  the  notes  in  the  discount  tickler,  arrange  them  in  the 
order  of  maturity  and  compare  them  with  the  tickler,  to  see  that  you  have  made  no 
errors  in  recording.  Next  find  the  envelope  entitled  "Bills  and  Notes  Discounted" 
among  your  miscellaneous  supplies.  Place  all  the  discounted  paper  in  this  envelope, 
which  represents  the  discount  clerk's  drawer  in  the  bank. 

(e)  If  you  have  entered  all  the  discounted  paper  in  the  discount  tickler,  it  shoulu 
aggregate  the  same  as  the  balance  of  Bills  Discounted  in  the  general  balance  ledger. 

To    BE    ENTERED    IN    THE    COLLECTION    TlCKLER 

Collection  Paper.  Banks  usually  receive  daily  from  customers  and  out-of-town 
banks  notes  and  sight  and  time  drafts  for  collection.  The  following  collections  were 
received  in  the  regular  way  and  sent  for  collection  to  the  places  at  which  they  were 
made  payable.  This  paper  should  be  shown  by  the  collection  tickler.  Since  there  is 
no  entry  to  be  made  in  the  collection  register  when  collections  are  paid,  you  need  not 
enter  the  collections  on  hand  in  your  collection  register. 

Write  the  following  dates  in  the  collection  tickler,  and  enter  each  item  under  the 
date  of  its  maturity  :  Dec.  12,  13,  14,  15,  17,  18,  18  (Dec.  18  occupies  two  spaces),  19, 
20,  26,  27,  29,  30,  Jan.  2,  3,  6,  7,  9.     (See  form  of  collection  tickler,  pages  30  and  31.) 

No.  586.  For  Geo.  W.  Miner  &  Co.,  accepted  draft  at  10  da}rs  from  Dec.  5,  on 
J.  H.  Wing,  Lyons,  for  $584.75.     Sent  to  Wayne  Co.  National  Bank,  L}rons. 

This  paper  is  due  Dec.  15.  Make  the  proper  entry  in  the  collection  tickler.  Do 
not  write  anything  in  the  Remarks  column. 

No.  562.  For  Walter  H.  Wood,  accepted  draft  at  30  days  from  Nov.  14,  on 
Wood  &  Keeler,  Newark,  for  81250.     Sent  to  Wayne  Co.  National  Bank,  Lyons. 

No.  568.  For  A.B.Curtis  &  Co.,  John  B. Sage's  note,at  30  days  from  Nov.  15,  payable 
at  First  National  Bank,  Lyons,  for  $852.75.     Sent  to  Wayne  Co.  National  Bank,  Lyons. 

No.  563.  For  C.  W.  Washburn,  Burke,  Hone  &  Co.'s  note,  at  30  days  from  Nov. 
14,  payable  at  Traders  National  Bank,  Buffalo,  for  $1560.  Sent  to  Traders  National 
Bank,  Buffalo. 

No.  569.  For  Black,  Adler  &  Co.,  Williams  &  Wood's  note,  at  1  month  from 
Nov.  15,  payable  at  Commercial  National  Bank,  Troy,  for  *500.  Sent  to  Commercial 
National   Bank,  Trow 

No.  532.  For  Ballantine  Bros.  &  Co.,  Geo.  B.  Hill's  note,  at  2  months  from  Oct. 
19,  payable  at  Commercial  National  Bank,  Troy,  for  $500.  Sent  to  Commercial 
X ; 1 1  tonal    Hank,  Troy. 

No.  531.  For  Fidelity  Mfg.  ( !o.,  Rogers,  Peet  &  Co.'s  note,  at  60  days  from  Oct.  13, 
payable  at  Merchants  Dank,  Troy,  for  $211.65.     Sent  to  Commercial  National  Bank,;Troy. 

No.  530.  For  Martin  Bros.,  J.  N.  Smith's  note,  at  60  days  from  Oct.  14.  payable 
at  Traders  National  Bank,  Buffalo,  for  $1200.     Sent  to  Traders  National  Bank,  Buffalo 


40  MODERN   ILLUSTRATIVE   BANKING 

No.  2.  In  your  package  entitled  "Work  for  Student"  find  the  memorandum  marked 
"No.  2."  The  vouchers  following,  marked  "No.  2,"  constitute  all  the  paper  in  the 
possession  of  the  bank  for  collection  at  this  time. 

(a)  This  paper  should.be  entered  in  the  collection  tickler  in  the  order  of  maturity. 
The  date  of  maturity  is  marked  on  the  face  of  the  paper,  and  the  number  on  the  back. 
Be  careful  to  make  no  mistake  in  recording.  If  in  doubt  as  to  the  manner  of  recording 
in  the  collection  tickler,  refer  to  the  model  tickler,  pages  30  and  31. 

(5)  The  last  indorsement  shows  the  person  or  firm  by  whom  the  paper  was  left  for 
collection.     Leave  the  "To  Whom  Sent"  column  blank. 

If  a  note  has  accumulated  interest,  the  interest  is  added  to  the  face  of  the  note  and 
the  entire  amount  written  in  the  column  entitled  "Amount  to  be  Collected." 

(c)  After  you  have  entered  the  paper  held  for  collection  in  the  collection  tickler, 
arrange  it  in  the  order  of  maturity  and  compare  it  with  the  tickler,  to  find  whether 
it  is  entered  properly.  Next  find  the  envelope  entitled  "Bills  and  Notes  Held  for 
Collection"  among  your  miscellaneous  supplies.  Place  the  paper  in  this  envelope, 
which  represents  the  collection  clerk's  drawer  in  the  bank. 

TO   BE   ENTERED    IN   THE    CERTIFIED    CHECK    BOOK 

The  following  certified  checks  have  not  yet  been  paid. 

Check  of  Black,  Adler  &  Co.,  certified  for  T.  B.  Smithson,  $1000. 

Check  of  A.  B.  Curtis  &  Co.,  certified  for  D.  M.  Jennings,  $1000. 

Enter  the  above  checks  in  your  certified  check  book  (see  form,  page  32).  Rule 
balancing  lines  across  the  Amount  column,  just  beneath  the  last  item.  These  checks 
are  already  in  the  individual  ledger  and  should  not  be  counted  when  you  foot  the 
certified  check  book  at  the  close  of  the  day. 

You  have  made  the  required  entries  in  the  various  principal  books  of  the  bank,  and 
are  now  ready  for  the  work  of  Monday,  Dec.  17. 

General  Suggestions 

Vouchers.  All  paper  and  vouchers  to  be  handled  will  be  found  in  the  envelope 
entitled  "Incoming  Vouchers."     Each  clerk's  work  is  plainly  marked. 

Numbering.  The  various  vouchers  and  papers  are  numbered  to  correspond  with 
the  numbers  of  the  transactions  in  this  set.  Before  making  the  entries,  you  should  care- 
fully compare  the  numbers  as  shown  on  the  papers  with  the  numbers  of  the  transactions 
which  you  are  recording. 

Incoming  Papers.  All  papers  which  you  may  receive  from  others  are  called 
"Incoming  Papers."     These  papers  are  made  out  just  as  they  would  be  in  business. 

Outgoing  Papers.  All  papers  which  you  give  to  others  are  called  "Outgoing 
Papers." 

Miscellaneous  Supplies.  The  Blank  forms  which  are  to  be  filled  out  by  you  are 
called  "Miscellaneous  Supplies." 

To  familiarize  you  with  the  general  details  of  banking,  you  will  be  required  to  do 
the  work  ordinarily  performed  by  a  number  of  officers  and  clerks  in  real  business. 


RECEIVING    TELLE  I!  S    WORK 


41 


RECEIVING    TELLERS    WORK 
Monday,  December  17 

Duties.  The  receiving  teller,  or,  as  he  is  frequently  called,  the  second  teller,  ranks 
in  position  next  to  the  paying  teller.  He  receives  deposits  from  customers,  and  makes 
the  original  credit  entries  in  the  bank  pass  books.  He  should  be  rapid  and  accurate  in 
counting  and  handling  money  and  able  to  detect  counterfeit  bills  and  coin,  and  forged 
negotiable  paper.  In  some  banks,  all  funds  received,  from  whatever  sources,  pass 
through  the  receiving  teller's  hands ;  in  others,  only  the  deposits  pass  through  his 
hands.  His  duties  in  this  work  will  be  limited  to  the  taking  of  deposits  and  the 
issuing  of  certificates  of  deposit  and  cashier's  checks. 

Examination  of  Deposits.  All  items  which  a  customer  presents  for  deposit 
should  be  carefully  examined.  Money  should  be  examined  for  the  purpose  of  detect- 
ing counterfeit  bills  and  coins.  Checks  on  our  bank  should  be  examined  in  regard  to 
the  indorsements,  dates,  form,  and  the  genuineness  of  the  signatures  of  the  drawers. 
Checks  on  other  banks  should  be  examined  in  regard  to  dates,  indorsements,  and  form. 

It  matters  not  whether  paper  offered  for  deposit  is  payable  to  order  or  to  bearer, 
the  depositor  should  always  be  required  to  place  his  indorsement  thereon. 

The  Bank  Pass  Book.  After  the  receiving  teller  has  examined  the  deposit  and 
compared  it  with  the  deposit  ticket  he  should  enter  the  amount  of  it  in  the  depositor's 
bank  book,  together  with  the  date,  and  his  (the  receiving  teller's)  initials ;  thus : 


2~<? 


X^6 'a 


4^0 


The  bank  book  is  the  depositor's  receipt,  and,  in  this  respect,  it  is  the  same  as  any 
other  receipt ;  it  is  always  open  to  explanation,  and  to  correction  if  it  can  be  shown 
that  an  error  has  been  commuted.  If,  by  mistake,  the  bank  should  enter  too  large  an 
amount  in  the  depositor's  bank  book,  correction  may  be  made  at  any  time,  if  the  bank 
proves  the  entry  to  be  an  error. 

Note.  The  records  in  a  bank  book  are  of  so  simple  a  nature  that  it  has  been  thought  best  not  to 
require  the  student  to  make  them  in  this  set;  but  the  method  of  writing  a  bank  book  explained  on 
pages  19  and  20  should  be  carefully  studied. 

As  receiving  teller,  you  will  take  care  of  the  deposits  for  the  day. 

Tin-  receiving  teller's  work  for  Dec.  17  will  be  found  under  the  memorandum  marked 
"Receiving  Teller's  Work,  Dec.  17,"  among  your  incoming  vouchers  for  that  date. 
Find  the  envelope  marked  "Receiving  Teller's  Drawer"  among  your  miscellaneous 
supplies,  and  put  it  on  your  desk. 


42 


MODERN    ILLUSTRATIVE   BANKING 


Memoranda  of  Transactions 

No.  3.  From  your  receiving  teller's  work  detach  the  papers  marked  "No.  3."  This 
is  the  deposit- of  Geo.  W.  Miner  &  Co.     Handle  it  as  follows  : 

(a)  Count  the  bills  and  see  if  they  agree  with  the  amount  named  on  the  deposit  slip. 
If  they  do,  place  a  check  mark  on  the  left  side  of  the  amount  on  the  deposit  ticket. 
Examine  the  drafts  and  check  to  see  if  they  are  properly  indorsed.  Compare  the 
amounts  on  these  papers  with  the  amount  listed  on  the  deposit  ticket,  placing  a  check 
mark  by  the  side  of  each  item  if  it  is  found  that  the  amounts  agree. 

(J)  Add  the  items  on  the  deposit  slip,  and  see  if  the  total  agrees  with  the  footing 
given  ;  if  not,  make  the  necessary  corrections. 

(V)  Place  the  check,  drafts,  money,  and  deposit  ticket  in  your  Receiving  Teller's 
Drawer. 

No.  4.  Take  care  of  this  deposit  as  you  did  No.  3.  Two  of  the  checks  are  on  our 
bank.  Mark  these  Paid  Dec.  17,  First  National  Bank,  in  red  ink,  across  the  face. 
Banks  generally  use  stamps  for  this  purpose  (see  form,  page  19). 

No.  5.  Handle  all  deposits  similar  to  Nos.  3  and  4  in  the  manner  outlined  for 
those  transactions. 

No.  6.  There  is  an  item  of  $3.50  exchange  on  the  out-of-town  check.  Deduct 
this  amount  from  the  deposit  slip  (see  form  below). 


Form  of  Deposit  Ticket 


Form  of  Deposit  Ticket 


deposited  in 

First  National  Bank, 

ROCHESTER,  N.Y. 

<x? sZ^tz/  / sy*    ton 

PLEASE  LI^T  EACH  CHECK  St  PA  RAT  ELY:  : 

Bills, 

Gold, 

Silver,    

Checks, _. 

Dollars 
4*-/7  & 

Cents. 

2-0/7 

/  t> 

c5~6>  /? 

/  /?  (7 

^^y 

y 

/"""~_ 

/  2.  /  0 

"-&^sT 

/ 

2-/7 

/ 

"7^ 

/  2./?  f 

»                           / 

TOTAL 

DEPOSITED  in 

First  National  Bank, 

ROCHESTER,  NY. 

^^y^rC^y  /  £    ion 

p.    R.L£A?,E..  LIST  EACtU'ttECX  SEPARATELY 

Bills,        

Gold,       .  *.._ 

Silver,    ..„ 

Dollars 

2-k  5-/7/7 

Cents. 

Checks, .. .._ 

T) 

« 

tt 

« 

« 

« 

TOTAL 

RECEIVING    TELLER  S    WORK 


43 


Date  the  cash  book,  and  enter  the  balance  of  cash  on  hand  as  shown  by  the  general 
balance  ledger.  Short-extend  the  foregoing  item  of  collection  and  exchange  on  the  left 
side  of  the  general  cash  book.      (See  form  of  general  cash  book,  pages  24  and  25.) 

Xos.  7  and  8.     If  in  doubt  as  to  what  to  do,  refer  to  instructions  for  No.  3. 

Certificates  of  Deposit.  Certificates  of  deposit  are  practically  the  checks  of  a 
bank  upon  itself.  They  are  usually  issued  to  persons  who  do  not  intend  to  become 
regular  customers.  If  the  purchaser  is  a  stranger,  he  should  be  required  to  write 
his  name  across  the  stub  of  the  certificate  in  the  certificate  of  deposit  book,  so  that 
when  the  instrument  is  presented  for  payment  the  indorsement  may  be  compared 
with  the  original  signature. 

Form  of  Certificate  of  Deposit 


Xo.  0.     Ralph   W.    Frisbee    gives    you    this    amount.   #4625.    for  a   certificate    of 

deposit.     Put  the   cash  in  your  Receiving   Teller's   Drawer.      Find  your  certificate 

of  deposit  book  among  your  miscellaneous  supplies,  and  make  out  a  certificate  in  favor 

of  Ralph  W.  Frisbee,  for  the  amount  of  his  deposit.     Make  the  proper  record  on  the 

stub  of  the  certificate.     Number  the  certificate  724  (see  form  above).     Sign  R.   R. 

Rockwood's  name  as  cashier,  per  your  name. 

Note.  In  actual  business  one  could  not  sign  the  cashier's  name  to  certificates  of  deposit,  cashier's 
cheeks,  bank  drafts,  etc.,  without  the  proper  authority.  Tn  this  work  it  is  assumed  that  the  student  has 
been  authorized  by  power  of  attorney  to  sign  all  papers  that  would  ordinarily  be  signed  by  the  cashier. 

I'lace  the  certificate  of  deposit  in  your  envelope  for  outgoing  papers.  From  the 
stub  of  the  certificate  make  out  a  deposit  ticket  (see  form,  page    12). 

I'lace  the  deposit  ticket  and  cash  in  your  Receiving  Teller's  Drawer.  Number 
consecutively  all  certificates  issued. 

No.  lO.  Be  sure  to  cancel  all  checks  on  our  bank,  as  explained  in  connection 
with  No.  4. 

Xos.    11,    12,    13.      Follow  the  preceding  instructions. 

If  you  have  taken  care  of  all  the  deposits  as  instructed,  you  are  now  ready  tc 
proceed  as  follows : 


44  MODERN    ILLUSTRATIVE    BANKING 

(a)  Take  all  the  checks,  drafts,  and  deposit  tickets  out  of  the  Receiving  Teller's 
Drawer.  Do  not  take  out  the  currency.  Sort  the  papers  you  have  taken  out  and  make 
the  following  classification  : 

Checks  on  our  bank. 

Checks,  drafts,  etc.,  payable  in  the  city. 

Deposit  tickets. 

Checks,  drafts,  certificates  of  deposit,  etc.,  payable  at  out-of-town  banks. 

Put  paper  bands  around  each  class  of  items,  and  on  these  bands  write  From 
Receiving  Teller. 

To  make  the  above  bands,  take  slips  of  blank  paper  about  one  and  one  half  inches  wide  and  eight 
inches  long.     Place  the  slips  around  the  items  and  fasten  the  ends  together  with  a  pin  or  mucilage. 

(5)  Place  the  deposit  tickets  in  the  envelope  marked  "  Individual  Bookkeeper's  Work 
for  Dec.  17,"  which  you  will  find  among  your  miscellaneous  supplies. 

(c)  Take  the  paper  payable  out  of  town  and  put  it  in  the  envelope  entitled  "  Mail 
Clerk's  Work,  Dec.  17,"  which  you  will  find  among  your  miscellaneous  supplies. 

(c?)  Take  the  checks,  etc.,  payable  at  our  bank,  and  place  them  in  the  Individual 
Bookkeeper's  Work,  Dec.  17. 

(e)  Take  the  checks,  etc.,  payable  in  the  city,  and  place  them  in  the  envelope  entitled 
"  Note  Teller's  Work,  Dec.  17,"  which  you  will  find  among  your  miscellaneous  supplies. 

(/)  Count  the  currency  in  the  Receiving  Teller's  Drawer.  It  should  aggregate 
817,391 ;  if  it  does,  take  a  long  blank  envelope  which  you  will  find  among  your 
miscellaneous  supplies,  and  on  the  outside  write,  From  receiving  teller  to  faying 
teller  at  the  close  of  business,  Dec.  17.  Place  this  envelope  in  Paying  Teller's 
Drawer,  which  you  will  find  among  your  miscellaneous  supplies. 

PAYING   TELLER'S   WORK 
Monday,  December  17 

Duties.  The  paying  teller  is  the  disbursing  officer  of  the  bank,  and  in  position 
ranks  next  to  the  cashier.  He  must  be  thoroughly  familiar  with  the  banking  business, 
skilled  in  accounting  and  handling  money,  strictly  honorable  and  trustworthy,  and  a 
good  judge  of  human  nature.  He  should  know  the  signatures  of  all  the  depositors, 
and  be  able  to  detect  forged  negotiable  instruments.  He  is  the  custodian  of  the  funds 
of  the  bank,  and  is  required  to  give  a  bond  for  the  safe  keeping  of  the  cash.  Usually 
the  vaults  of  the  bank  are  provided  with  two  or  more  doors  with  combination  locks,  one 
of  which  is  known  only  to  the  cashier,  and  the  other  only  to  the  paying  teller.  By 
this  means  it  is  impossible  for  either  of  these  officials  to  enter  the  vaults  alone,  thus 
reducing  the  great  responsibility  which  would  otherwise  be  imposed  upon  a  single 
individual. 

Paying  Checks.  As  the  principal  part  of  the  paying  teller's  work  consists  in 
making  disbursements  upon  vouchers  known  as  bank  checks,  it  is  essential  that  he 
should  be  thoroughly  familiar  with  these  instruments,  and  subject  them  to  the  most 
careful  scrutiny  before  paying  them. 

When  a  check  is  presented  for  payment  the  cashier  should  be  sure  that 

1.    The  signature  is  genuine. 


PAYING   TELLER'S    WORK  45 

2.  The  drawer's  account  is  good  for  the  amount  named  in  it. 

3.  The  person  presenting  it  is  the  one  entitled  to  receive  the  money. 

4.  It  is  not  post  dated  ;   that  is,  dated  ahead. 

5.  It  is  made  payable  to  some  particular  individual  or  company ;  or  specifies  the 
title  of  the  account  or  the  particular  object  for  which  it  was  issued. 

6.  It  specifies,  both  in  figures  and  in  words,  the  amount  of  money  that  is  to  be  paid. 
These  amounts  should  agree,  and  in  the  event  of  their  not  agreeing  the  check  should 
be  returned  for  correction. 

The  paying  teller  would  be  relieved  from  responsibility  in  such  instances  by  paying  the  amount 
indicated  in  writing,  but  the  custom  of  banks  is  to  return  a  check  where  there  is  a  disagreement  between 
the  figmres  and  the  words. 

As  paying-  teller,  you  will  now  make  payments  required  for  the  day. 
•     The  work   for  [laying  teller  will  be  found  under  the  memorandum  marked  "Paying 
Teller's  Work,  Dec.  17,"  in  your  package  of  incoming  vouchers. 

The  envelope  marked  "Paying  Teller's  Drawer"  will  be  used  to  preserve  the  daily 
work  of  the  paying  teller. 

Memoranda  of  Transactions 

No.  14.  Saturday's  proof  showed  that  the  cash  on  hand  was  $317,730.22.  In  your 
package  of  incoming  vouchers  for  Dec.  17  you  will  find  an  envelope  marked  "  Paying 
Teller's  Cash."  Take  the  cash  out  of  the  envelope  and  ascertain  whether  it  is  correct 
or  not.  If  the  amount  is  found  to  be  correct,  classify  your  bills,  i.e.  put  $1000  bills  in 
one  pile,  $500  bills  in  another,  etc.  After  the  cash  has  been  classified,  put  a  narrow  band 
of  blank  paper  around  each  pile,  and  on  the  slip  indicate  in  pencil  the  amount  of  that 
particular  package.  Add  these  amounts ;  the  total  should  be  the  amount  of  cash  on 
hand.     Lay  the  packages  of  bills  out  before  you  to  use  in  making  payments. 

No.  15.     D.  M.  Morgan  has  presented  this  check  to  be  cashed. 

(a)  Examine  the  check  to  see  if  it  is  properly  indorsed ;  if  it  is,  pay  it.  Always 
make  payments  in  the  largest  bills  possible.  Count  all  money  that  you  pay  out  three 
times.  Put  the  money  in  the  envelope  for  outgoing  papers.  It  will  be  impossible  for 
you  to  prove  the  cash  if  you  do  not  exercise  great  care  in  handling  your  money.  Re- 
member that  any  form  of  carelessness  would  not  be  tolerated  in  actual  banking  business. 

(6)  Write  Paid,  Dec.  17,  First  National'  Bank,  in  red  ink,  across  the  face  of  the 
check  and  place  it  in  Paying  Teller's  Drawer. 

No.  16.     Follow  the  instructions  for  No.  15.     Cancel  all  the  checks  on  our  bank. 

No.  17.  Unless  otherwise  specified,  all  checks,  drafts,  etc.,  presented  are  to  be 
cashed.      When  in  doubt  as  to  what  to  do,  refer  to  the  instructions  for  No.  15. 

No.  18.  This  check  does  not  need  to  be  indorsed.  If  it  were  presented  by  any  one 
other  than  cither  of  the  drawers,  an  indorsement  would  be  necessary. 

Nos.  19,  20.  Collection  on  each,  75^.  Deduct  the  charge  for  collection  from  the 
amount  of  each  check  before  paying  it.  Credit  Collection  and  Exchange  in  general 
cash  book.      Do  not  cancel  these  cheeks. 

Certified  Checks.  One  of  the  most  important  functions  of  the  paying  teller  in 
the  larger  cities  is  the  certification  of  checks. 


46 


MODERN    ILLUSTRATIVE   BANKING 


When  a  check  is  presented  for  certification,  the  paying  teller  should  scrutinize  it  the 
same  as  if  the  check  were  presented  for  payment,  and  if  he  has  any  doubt  in  regard  to 
the  depositor's  balance  he  should  apply  to  the  individual  bookkeeper  for  information 
before  making  the  certification. 

Form  of  Certified  Check 


.J<9— 


^/^ 


'  (>, 


c«(>.»  eosTtouiS 


When  a  check  is  certified,  the  bank  becomes  responsible  for  its  payment. 

In  many  banks  the  cashier  certifies  all  paper  presented  for  certification.  In  some  banks  this  work 
is  performed  by  either  the  cashier  or  the  paying  teller. 

The  greater  portion  of  the  business  of  the  brokers  of  Wall  Street  (New  York)  is  transacted  by 
certified  checks.  It  would  be  a  very  difficult  task  to  count  the  money  for  these  voluminous  transactions, 
to  say  nothing  of  the  trouble  and  care  of  handling  it. 

A  depositor  sometimes  has  a  check  certified  so  that  he  may  draw  against  it.  A  bank  would  be 
unwilling  to  allow  a  customer  to  deposit  an  uncertified  check  for  twenty  thousand  dollars,  and  immedi- 
ately draw  fifteen  thousand  dollars,  before  the  bank  had  any  opportunity  of  ascertaining  whether  or 
not  the  check  was  good. 

Some  banks  (notably  those  of  Boston)  make  it  a  rule  not  to  certify  checks,  but,  instead,  to  take  up 
the  check,  and  issue  therefor  the  bank's  certificate  of  deposit,  or  a  cashier's  check. 

The  certification  of  a  check  does  not  guarantee  the  indorsements,  nor  does  it  guarantee  that  the 
check  is  properly  filled  out.  When  a  bank  certifies  a  check,  it  declares,  in  effect,  that  the  signature  is 
genuine,  and  that  the  customer  has  the  amount  named  in  the  check  on  deposit;  but  should  the  bank, 
without  any  carelessness  on  its  part,  certify  a  raised  check,  it  can  only  be  held  for  the  amount  for  which 
the  check  was  originally  drawn. 

No.  21.     Renshaw,  Westermann  &  Co.  present  this  check  for  certification. 

(a)  Certify  the  check  according  to  the  form  given  above.  Sign  your  name  as 
paying  teller. 

(5)  Place  the  check  in  the  envelope  for  outgoing  papers. 

The  drawer  of  a  certified  check  is  charged  with  the  amount  of  the  check  at  the  end 
of  the  day  from  the  certified  check  book,  and  not  when  the  check  is  presented  for 
payment. 

(<?)    Make  an  entry  in  the  certified  check  book  (see  form,  page  32). 

No.  22.     This  check  is  to  be  certified.     Follow  instructions  for  No.  21. 


PAYING    TELLER  S    WORK 


47 


Bank  Drafts.  Banks  located  iu  the  smaller  cities  usually  keep  money  deposited 
in  banks  in  New  York,  Boston,  Chicago,  or  other  financial  centers,  against  which  they 
draw  drafts  to  sell  to  their  customers.  Drafts  on  New  York  are  very  extensively  used 
for  making  remittances  in  all  parts  of  the  country.  Banks  which  draw  drafts  are 
charged  with  the  drafts  by  the  drawee  bank  in  practically  the  same  manner  as  a  resi- 
dent depositor  would  be  charged  with  a  check. 

Form  of  Bank  Draft 


<^M?>^  M. 


y/z^ 


The  deposits  which  banks  make  with  their  correspondents  in  different  financial  centers  are  composed 
principally  of  drafts  and  checks  on  banks,  and  drafts  on  firms  and  individuals  in  and  near  the  city  in 
which  the  correspondent  bank  is  located,  and  money  sent  to  the  correspondent  bank  by  express.  The 
drafts  remitted  to  correspondents  are  received  from  customers  by  the  different  tellers.  This  is  termed 
"buying  exchange." 

When  a  bank  sells  a  draft  on  another  bank  it  is  termed  "  selling  exchange." 

From  the  above  it  will  be  seen  that  the  bank  does  not  sell  the  same  drafts  (exchange)  that  it  buys. 
The  drafts  purchased  are  remitted  to  its  correspondents,  and  drafts  are  drawn  and  sold  against  the 
balance  so  created. 

No.  23.  This  check  is  in  payment  for  New  York  draft  No.  340  and  exchange  upon 
same. 

(  a)  Find  the  New  York  draft  book  among  your  miscellaneous  supplies,  and  fill  out  a 
blank  draft.  Sign  it  as  instructed  in  connection  with  certificate  of  deposit  No.  9.  Make 
the  proper  record  on  the  stub  of  the  draft  book.  Pay  out  no  money.  Put  the  draft 
in  the  envelope  for  outgoing  papers  and  the  check  in  the  Paving  Teller's  Drawer.  (See 
form  of  New  York  draft  above.)  Unless  otherwise  instructed,  always  make  out  New 
York  drafts  in  favor  of  the  purchaser.  Do  not  enter  the  exchange  on  New  York  drafts 
in  the  general  cash  book  until  the  end  of  the  day,  when  the  total  amount  should  be 
credited  from  the  draft  book. 

No.  24.  This  is  for  New  York  draft.  Follow  the  instructions  for  No.  23.  Number 
the  (halts  consecutively. 

No.  25.      Presented  for  certification.     Follow  the  instructions  for  No.  21. 


48  MODERN    ILLUSTRATIVE   BANKING 

No.  26.  The  $3245.50  in  this  envelope  was  given  you  by  B.  T.  Kline  &  Co.,  in 
payment  for  a  New  York  draft.     Face  of  the  draft,  $3240  ;  exchange,  $5.50. 

Write  the  draft  the  same  as  instructed  in  No.  23.  Place  the  money  in  the  Paying 
Teller's  Drawer. 

Nos.  27,  28,  29.  These  papers  are  presented  for  payment.  Collection  and  exchange 
on  No.  29,  11.50.     Enter  the  collection  and  exchange  in  the  general  cash  book. 

No.  30.  These  three  checks  are  presented  by  a  messenger  from  the  Bank  of 
Monroe,  City,  for  payment.     Pay  the  sum  of  them  in  cash.     Cancel  the  checks. 

No.  31.  Pay  this  in  cash.  Turn  to  your  certified  check  book  and  fill  out  the  When 
Paid  and  the  Amount  Paid  columns.     Place  the  check  in  the  Paying  Teller's  Drawer. 

No.  32.     Pay  this  in  cash,  and  treat  it  the  same  as  No.  31. 

At  this  point  take  all  the  papers  out  of  Paying  Teller's  Drawer,  and  classify  them ; 
then  proceed  as  follows: 

(a)  Take  all  the  checks  drawn  on  our  bank,  write  From  Paying  Teller  on  a  slip 
of  paper,  place  it  around  the  checks,  and  put  them  in  Individual  Bookkeeper's  Work, 
Dec.  17. 

(b)  Take  all  checks  drawn  on  other  city  banks,  write  on  a  piece  of  paper  From 
Paying  Teller,  place  it  around  the  checks,  and  put  them  in  Note  Teller's  Work,  Dec.  17. 

(<?)  Take  all  checks  and  drafts  on  banks  out  of  town,  write  on  a  slip  of  paper  From 
Paying  Teller,  place  it  around  the  items,  and  put  them  in  Mail  Clerk's  Work,  Dec.  17. 

Count  your  cash  on  hand  very  carefully,  including  the  cash  in  the  envelope  handed 
in  by  receiving  teller.  Place  a  slip  of  paper  around  each  denomination,  and  on  the  slip 
indicate  the  amount  in  the  pile.  The  slips  that  were  first  prepared  for  this  purpose 
may  be  used  again  if  the  amounts  first  written  in  pencil  are  erased.  Your  cash  is  now 
in  convenient  form  for  handling  on  the  next  business  day.  The  total  amount  in  the 
hands  of  the  paying  teller  should  be  $330622.76.  If  you  find  that  your  cash  agrees 
with  this,  place  it  in  a  long,  blank  envelope  and  on  the  outside  write  :  "  Paying  Teller's 
Cash."     Place  the  envelope  in  the  paying  teller's  drawer. 

DISCOUNT   CLERK'S    WORK 
Monday,  December  17 

Duties.  The  discount  clerk  has  charge  of  the  loaning  department  of  the  bank ;  he 
keeps'  the  records  of  this  department,  and  acts  as  the  custodian  of  most  of  the  bills 
receivable. 

His  frequent  intercourse  with  customers  demands  a  large  amount  of  tact,  courtesy, 
and  judgment,  while  his  accountancy  duties  require  accuracy  and  rapidity  in  a  high 
degree.  By  many  he  is  considered  as  standing  an  equal  chance  with  the  paying  teller 
for  promotion  to  the  position  of  cashier. 

Loans.  Commercial  paper,  and  time  and  demand  loans  made  upon  various  kinds  of 
collateral  constitute  the  greater  part  of  the  bills  receivable  of  most  banks.  Such  paper 
is  usually  received  from  regular  customers,  though,  in  large  cities,  much  of  it  frequently 
comes  from  note  brokers,  who  buy  the  paper  from  firms  or  individuals,  and  afterwards 
sell  it  to  the  bank. 


discount  clerk's  work  49 

Many  banks  invest  a  portion  of  their  money  in  bonds,  which,  while  not  yielding 
so  high  a  rate  of  interest  as  commercial  paper,  may  always  be  depended  upon  as  a 
reserve,  practically  as  reliable  as  legal  tenders  in  a  money  stringency  or  financial  panic 
of  any  kind. 

Making-  Loans.  When  a  person  desires  to  borrow  money  from  a  bank,  application 
is  usually  made  to  the  cashier,  who,  in  most  banks,  immediately  passes  upon  it ;  that 
is,  he  accepts  or  rejects  it.  If  he  accepts,  the  applicant  can  get  his  money  at  once. 
The  convenience  of  this  method  over  that  of  compelling  the  customer  to  wait  four  or 
live  days,  until  the  meeting  of  the  board  of  directors,  is  obvious.  The  greatest  favor 
that  can  be  bestowed  upon  an  applicant  for  a  loan,  next  to  granting  it,  is  a  prompt 
refusal. 

Loans  made  in  this  manner  are  reviewed  by  a  finance  committee  appointed  by 
the  board  of  directors,  or  by  the  board  of  directors  themselves,  and  if  dissatisfac- 
tion is  expressed  in  regard  to  any  of  the  paper,  the  paper  is  disposed  of  at  the  earliest 
convenient  day. 

In  some  banks  the  applications  for  loans  are  handed  to  the  discount  clerk,  who  records  the  fact  in 
what  is  known  as  an  "  Offering  "  or  "  Application  "  book.  This  book  is  provided  with  columns  for  the 
date  of  the  application,  maker  of  the  note,  payer,  indorser,  collateral  security,  time,  and  a  column  in 
which  is  noted  the  state  of  the  applicant's  account  (if  he  is  a  depositor),  the  amount  of  paper  that  the 
bank  is  already  carrying  for  him,  and  the  average  amount  of  his  daily  balance.  The  offerings  are 
presented  to  the  board  of  directors  at  their  regular  meetings,  and  they  reject  or  accept  such  paper  as 
they  deem  advisable. 

How  to  ascertain  the  Due  Date  of  Notes.  If  a  note  is  payable  so  many  months 
after  date,  the  due  date  must  be  ascertained  by  counting  months.  If  the  note  is 
payable  so  many  days  after  date,  the  due  date  must  be  ascertained  by  counting  days. 

Days  of  Grace.  As  days  of  grace  have  been  abolished  by  statutory  enactments  in 
the  majority  of  states,  they  are  not  considered  in  this  work.  To  find  the  actual  due 
date  of  a  note  in  the  states  in  which  three  days  of  grace  are  allowed,  it  would  be 
necessary  in  actual  business  to  add  three  days  to  the  date  ascertained  by  the  instruc- 
tions herein  given.  For  example  :  A  note  drawn  on  June  1,  payable  ten  days  after 
date,  would  be  due  June  14,  and  not  on  June  11,  as  would  be  the  case  if  the  three 
days  of  grace  were  not  considered. 

Method  of  counting  Time  for  discounting  Notes.  In  this  work  always  count 
the  actual  number  of  days  from  the  date  of  discount  to  the  due  date  of  the  note,  and 
calculate  the  discount  on  the  note  for  the  number  of  days  so  ascertained.  If  the  note 
bears  interest  before  due,  the  interest  for  the  length  of  time  that  the  note  has  to  run 
is  ascertained  and  added  to  the  face  of  the  note.  The  total  is  then  discounted  for  the 
difference  in  time  between  the  date  of  discount  and  the  due  date  of  the  note. 

The  method  of  counting  time  for  discounting  notes  varies  in  different  banks,  and  often  in  the  same 

bank.     Some  l>;mks  count  months  for  the  full  number  of  months,  and  days  for  the  fraction  of  a  month. 

Others  ron nt  the  actual  number  of  days,  while  some  few  count  one  day  more  than  the  actual  number  of 

Thus,  a   customer  discounting  a  note  Jan.  1<>,   due  -Fan.  l'O,  would  be  charged  with  interest 

for  eleven  days  instead  of  ten.     This  is  on  the  hypothesis  that  the  iey  is  placed  to  his  credit  dan. 

10,  and  he  can  use  it  on  that  date  if  he  so  desires,  so  that  in  reality  he  has  the  use  of  the  money 
eleven  days. 

BANKING  — 4 


50 


MODERN    ILLUSTRATIVE    BANKING 


As  discount  clerk,  you  will  take  care  of  paper  offered  for  discount. 

The  work  for  this  department  of  the  bank  will  be  found  among  your  incoming 
vouchers  under  the  memorandum  marked  "Discount  Clerk's  Work,  Dec.  17." 

The  daily  work  of  the  discount  clerk  will  be  kept  in  the  envelope  marked  "  Bills  and 
Notes  Discounted." 

Memoranda  of  Transactions 

You  already  have  a  number  of  notes  on  hand  from  previous  business  in  the  envelope 
marked  "  Bills  and  Notes  Discounted."  See  if  these  papers  are  arranged  with  reference 
to  maturity  ;   if  not,  arrange  them,  and  proceed  as  follows : 

(«)  Turn  to  your  discount  tickler.  Take  all  paper  maturing  on  Dec.  17,  and 
compare  it  with  the  tickler.  Some  of  the  notes  and  drafts  have  been  sent  to  out-of- 
town  banks  for  collection,  and  these,  of  course,  you  should  not  have  on  hand.  The 
others  should  check  with  the  tickler ;  if  they  do,  place  them  in  Note  Teller's  Work 
for  Dec.  17. 

(6)  Place  the  remaining  notes  and  bills  back  in  Bills  and  Notes  Discounted. 

The  following  paper  is  offered  for  discount  and  accepted  by  the  cashier. 

No.  33.     Presented  by  Martin  Bros.  ;  discounted  at  6%.     Proceed  as  follows  : 
(a)  Determine  when  the  note  is  due,  and  indicate  this  in  red  ink,  as  shown  below. 

Form  of  entering  Due  Date  on  Note 


Some  banks  have  a  special  stamp  with  which  to  place  the  number  and  the  due  date  on  a  note. 
Others  write  the  due  date  across  the  face  or  in  the  lower  left-hand  corner  in  either  red  or  black  ink. 
The  student  may  use  red  ink  in  making  such  records. 

(6)  Count  the  exact  number  of  days  from  Dec.  17  to  the  maturity  of  the  note, 
and  find  the  discount.  Be  sure  your  discount  is  correctly  calculated.  Do  not  make 
mistakes. 

(c)  Enter  the  note  in  the  discount  register.  (See  model  discount  register,  pages  24 
and  25.)  Number  the  note  450,  and  from  this  on  number  all  notes  consecutively.  Where 
there  is  no  indorsement  other  than  that  of  the  discounter,  it  is  unnecessary  to  fill  out 


DISCOUNT    CLERK  S    WORK 


51 


column  entitled  "  Indorser  and  Collateral "  in  the  discount  register.     If  the  note  bears 
several  indorsements,  record  the  name  of  the  indorser  preceding  the  discounter. 

(c?)  On  the  back  of  the  note,  in  red  ink,  write  the  number  and  the  date  of  maturity. 
Place  note  in  the  Bills  and  Notes  Discounted  envelope. 

No.  34.     Discounted  at  6%.     Follow  directions  for  No.  33. 

Xotes  with  Accumulated  Interest.  If  a  note  which  has  accumulated  interest  is 
offered  for  discount,  the  amount  of  the  interest  should  be  ascertained,  and  both  the 
interest  and  the  value  of  the  note  at  maturity  should  be  indicated  in  red  ink  on  the 
face  of  the  note.  If  the  note  is  payable  out  of  town,  this  should  be  done  before 
the  note  is  sent  away  for  collection. 

The  following  illustration  represents  a  note  treated  in  the  manner  described  above. 

Interest-bearing  Note  with  Value  at  Maturity  Indicated 


7^??-ZS^Z7^7^/^ 


>Ua/ti€//Ucetiw/tmm^nJ6leJ///^ 


//,- : 


iti. 


^ir??^ 


<M</- 


StromBeirg rAllat  &•  Co.  Stationers,  Chicago,  III. 


£e&a5fe^S*?ibWWJ!^WHHWW^^^ 


No.  35.     Discounted  at  6%;   collection,  |%.      Proceed  as  follows : 

<  a  /'  (  alculate  the  interest  for  4  months  at  G%.  Write  the  amount  of  interest,  in  red 
ink.  on  the  note.     Add  interest  to  face,  and  write  this  sum  on  note  (see  form  above). 

(b)  Discount  the  amount  of  the  note  (face  plus  interest  for  four  months)  for  the 
time  it  has  yet  to  run.  Compute  the  collection  on  the  amount  the  bank  will  eventually 
collect  (the  face  of  the  note  plus  the  interest  ). 

(  e)  Add  the  discount  and  the  collection  and  exchange,  and  subtract  their  sum  from 
the  face  of  the  note  plus  the  interest.  The  remainder  will  be  the  amount  to  the  credit 
of  Keeler,  Boynton  iV:  Co. 

No.  30.     Same  as  No.  33. 

Fool  and  rule  your  discount  register  (see  model,  pages  24  and  2~>).  From  the 
discount  register  enter  each  note  or  draft  in  the  discount  tickler  under  the  date  on 
which  it  becomes  due  (see  model,  pages  26  and  27).     Check  the  items  transferred. 

All  paper  payable  oul  of  town  should  be  sent  away  from  1<>  to  20  days  before  it  is 
due.  10  x  a  mi  in'  the  discount  tickler,  and  see  if  you  should  send  ;m\  notes  away  :  if  so,  til! 
out  the  To  Whom  Sent  column  in  the  tickler,  and  write  letters  to  hanks  to  which  paper 
is  to   be  sent.      Send    Nos.   430  and  438  to  Commercial    National   Bank,  Troy;   scud 


52 


MODERN   ILLUSTRATIVE   BANKING 


No.  452  to  Chemical  National  Bank,  New  York.  Use  printed  blanks  which  will  be 
found  among  your  miscellaneous  supplies.  (See  model  letter,  below.)  Write  "Per" 
and  your  own  name  beneath  "R.  R.  Rockwood,  Cashier." 

Form  of  Letter  advising  Paper  sent  for  Collection  and  Credit 


.'"  .yJJS 


de0ria/$% '    (hssws^  .2  tfy/3 - 


f — =*•  —v 


zz^ 


Esq.,  Cashier. 


Dear  Sir : 


J  enclose  for  collection  and  credit  as  stated  below : 


Very  respectfully, 


W.  S.  SMITH,  Cashier. 


NO.  OR   DATE. 


AMOUNT. 


<sf/?7^'S  / /# 


2-W 


T 


iJ2- 


^- 


-S^r7-w^7. 


^?wV  S7Zi0^&?>7* 


/  0  0  0 


^f<-r 


^C-^-Z^'     AJ:7>^.. 


^W 


styrf 


^/JLyu^^^  ^A^/I^y^^^^ 


2z£-2jZ. 


Indorse  the  notes,  etc.,  sent  as  follows: 

Pay  to  the  order  of 

(Name  of  Bank) 

(Address) 

First  National  Bank, 

Rochester,  N.Y., 

R.  R.  Rockwood,  Cashier, 

Per  (your  name). 


COLLECTION    CLERK'S   WORK  53 

The  following  is  a  list  of  our  regular  correspondents  and  the  names  of  their  cashiers : 
Chemical  National  Bank,  New  York;  cashier,  H.  A.  Seavey.  Farmers  National  Bank, 
Philadelphia,  Pa.;  cashier,  M.  N.  Newberry.  Traders  National  Bank,  Buffalo,  N.Y.; 
cashier,  Robert  B.  Watson.  Commercial  National  Bank,  Troy,  N.Y.;  cashier,  W.  B. 
Smith.     Wayne  County  National  Bank,  Lyons,  N.Y.;  cashier,  A.  M.  Hinman. 

Have  the  letters  approved  by  your  teacher,  and  then  place  them  in  the  envelope 
for  outgoing  papers. 

Examine  your  discount  tickler,  and  see  if  there  are  any  bills  or  notes  maturing 
to-day  that  have  been  sent  to  other  banks;  if  so,  write  Charge  and  the  initials  of  the 
bank  to  be  charged  in  the  Remarks  column  of  the  discount  tickler.  (See  model,  pages 
26  and  27.)  Bills  discounted  sent  away  for  collection  should  be  charged  on  the  day  of 
their  maturity  to  the  banks  to  which  they  were  sent. 

COLLECTION    CLERK'S    WORK 

Monday,  December  17 

Duties.  The  collection  clerk  takes  charge  of  all  paper  received  by  the  bank  for 
collection,  and  makes  the  original  entries  for  such  upon  the  proper  books  of  record. 
He  should  have  a  thorough  knowledge  of  the  laws  and  customs  relating  to  promissory 
notes  and  drafts,  and  the  rights  and  duties  of  parties  to  such  paper. 

Collection  Paper.  Paper  received  by  a  bank  for  collection  comes  from  two 
sources :  customers  and  out-of-town  banks.  Such  paper  does  not  become  the  prop- 
erty of  the  bank.  The  bank  acts  only  as  agent  for  the  owners  of  the  paper^  charging 
a  fee,  called  "collection,"  for  its  services. 

Entering  Collections  in  the  Bank  Pass  Book.  Notes,  sight  and  time  drafts  left 
for  collection  should  be  entered  in  the  back  of  the  depositor's  bank  book.  When  the 
depositor  has  a  number  of  collections,  it  is  customary  for  him  to  list  them  on  a  memo- 
randum slip,  or  to  record  them  in  a  book  which  is  especially  provided  for  this  purpose. 
The  teller  may  receipt  for  the  entire  number  of  items  at  the  bottom  of  the  memoran- 
dum slip,  or  immediately  beneath  the  items  in  the  book. 

Many  banks  enter  paper  left  for  collection  in  the  same  part  of  the  bank  book  as  the  deposits,  and 
when  paper  is  not  collected  the  amount  of  it  is  not  extended  in  the  money  column.  This  is  termed 
"entering  short."  Some  banks  give  no  receipt  whatever  for  the  paper  left  for  collection.  While  such 
practice  is  quite  common  in  many  localities  and  very  convenient  for  the  banks,  it  can  hardly  be  encour- 
aged from  the  standpoint  of  the  accountant.  In  the  event  that  the  paper  is  lost  without  being  entered 
on  the  books  of  the  bank,  there  would  be  absolutely  nothing  to  show  that  the  depositor  had  left  it  there. 

Numbering  Collections.  Some  banks  number  all  paper  received  for  collection, 
the  same  as  paper  received  for  discount.  Other  banks  do  not  number  collections  unless 
such  paper  already  bears  a  number,  in  which  case  the  number  it  bears  is  recorded.  As 
n  matter  of  convenience  for  the  student  it  has  been  thought  best  for  him  to  number  all 
collections  consecutively,  the  same  as  he  has  learned  to  number  discounts. 

Timing-.  When  paper  is  received  for  collection,  the  collection  clerk  should  mark 
on  each  note  or  draft  the  date  of  maturity  (see  model,  page  oO).  A  careful  clerk  will 
always  revise  the  timing  of  his  notes  to  guard  against  any  errors.  II"  he  should  time  a 
note  too  late,  and  the  drawer  should  fail  to  pay,  the  bank  would  be  liable  to  the  owner. 


54  MODERN    ILLUSTRATIVE   BANKING 

Notice  of  protest  must  be  given  the  indorsers  not  later  than  the  close  of  the  day  following  that  on  which 
the  paper  was  due,  provided  the  indorsers  live  in  the  city  in  which  the  paper  is  protested.  If  they  live  at  dis- 
tant points,  the  notices  must  be  mailed  to  them  not  later  than  the  day  following  the  due  date  of  the  paper. 

As  collection  clerk,  you  will  attend  to  the  collection  of  paper  due  to-day,  and 
receive  all  notes,  bills,  etc.,  left  for  collection. 

Your  work  will  be  found  under  the  memorandum  marked  "Collection  Clerk's 
Work,  Dec.  17."  The  envelope  marked  "Bills  and  Notes  Held  for  Collection"  will  be 
used  as  collection  clerk's  drawer  in  the  bank. 

Memoranda  of  Transactions 

You  already  have  some  notes,  etc.,  on  hand  in  the  envelope  for  Bills  and  Notes 
Held  for  Collection.     Proceed  as  follows  : 

(a)  Turn  to  collection  tickler,  and  compare  the  paper  on  hand  with  that  in  the  tickler. 
The  tickler  shows  which  papers  have  been  sent  away.  If  everything  is  found  correct, 
put  the  paper  payable  in  the  city  Dec.  17  in  Note  Teller's  Work,  Dec.  17. 

(6)  Place  the  remaining  notes  and  drafts  back  in  Bills  and  Notes  Held  for  Collection. 

The  following  paper  has  been  left  for  collection  : 

No.  37.     From 

Buffalo,  Rochester  &  Pittsburg  R.  R.  Co.  (No.  600). 

Chas.  M.  Deville  (No.  601). 

Walter  H.  Wood  (No.  602). 

A.  B.  Curtis  &  Co.  (No.  603). 

The  last  indorsement  shows  by  whom  the  paper  was  left  for  collection. 

(a)  Find  the  maturity  of  each  item  and  write  it  on  the  face  of  the  draft  in  red  ink 
as  shown  on  page  50. 

(b)  Enter  each  of  these  items  in  the  collection  register  (see  form,  pages  28  and  29). 
Number  the  collections  consecutively,  beginning  with  No.  600.  If  the  paper  is  not 
indorsed  by  any  one  other  than  the  person  for  whom  it  is  collected,  the  Indorser 
column  is  left  blank. 

(c)  Write  the  number  and  date  of  maturity  on  the  back  of  each  item  in  red  ink 
and  put  the  paper  in  Bills  and  Notes  Held  for  Collection.  From  the  collection  register 
make  the  proper  entries  in  the  collection  tickler.     Check  the  items  transferred. 

No.  38.  This  is  from  your  Buffalo  correspondent.  The  paper  is  already  numbered 
on  the  back,  but  you  should  number  it  above  the  number  of  the  Buffalo  bank. 

(a)  Number  consecutively  from  collection  register.  Number  the  items  in  the 
order  that  they  are  listed  on  the  envelope. 

(5)  Time  the  items  the  same  as  you  timed  No.  37. 

(c)  Enter  the  paper  in  collection  register,  and  then  place  it  in  Bills  and  Notes  Held 
for  Collection.  Place  the  letter  in  the  Letter  File,  which  will  be  found  among  miscel- 
laneous supplies. 

(d)  From  the  collection  register  make  the  proper  entries  in  the  collection  tickler. 

No.  39.     Proceed  as  follows  : 

(a)  Compare  the  items  enumerated  with  the  items  for  corresponding  numbers  in 
your  collection  tickler.     If  they  agree,  check  the  items  in  the  letter  of  advice. 


NOTE  teller's  work  55 

(5)  Add  the  columns  of  the  letter.  See  if  the  sum  of  the  collection  and  exchange 
plus  the  total  proceeds  is  equal  to  the  footing  of  the  Amount  column. 

(<?)  In  the  Remarks  column  of  the  collection  tickler  for  No.  531  write  Charge 
C.  JV.  B.;  bank's  coll.  50$,  and  for  No.  569,  Charge  C.  N.  B.;  bank's  coll.  $1.25. 

(d)   Place  the  letter  in  the  Letter  File. 

These  charges  for  collection  are  made  by  Commercial  National  Bank,  Troy,  and  so  should  not  be 
entered  in  our  cash  book.  When  the  firms  for  whom  these  items  were  collected  are  credited  the 
collection  charges  will  be  deducted. 


lB 


NOTE   TELLER'S    WORK 

Monday,  December  17 

Duties.  The  duties  of  the  note  teller  vary  in  different  banks.  In  this  work  he 
will  take  charge  of  all  cash  items  payable  in  the  city,  and  all  time  paper  payable  in  the 
city  and  shown  by  the  collection  tickler  and  discount  tickler  to  be  due.  Each  morning 
the  note  teller  will  receive  all  maturing  city  collections  from  the  collection  clerk ;  and 
all  city  maturing  bills  discounted  from  the  discount  clerk.  At  the  close  of  each  day 
the  paying  teller,  receiving  teller,  and  mail  clerk  will  give  the  note  teller  all  their  city 
cash  items,  and  these  items  will  be  collected  on  the  day  following. 

In  the  majority  of  banks  the  note  teller  sells  bank  drafts,  but  in  this  work  it  has  been  thought  best  to 
have  the  paying  teller  perform  this  duty. 

Messengers.  Most  banks  have  messengers  employed  for  the  purpose  of  collecting 
notes,  drafts,  etc.,  due  in  the  city.  Sometimes  the  porter  performs  this  service. 
These  employees  are  under  the  direct  charge  and  supervision  of  the  note  teller.  He 
should  see  that  they  lay  out  a  definite  route  before  leaving  the  bank,  and  that  their 
work  is  performed  with  proper  care,  and  with  due  regard  to  the  laws  and  customs 
relating  to  negotiable  paper. 

Methods  of  paying  Notes.  A  note  is  usually  paid  in  one  of  the  following  ways  : 
(1)  By  cash ;  (2)  by  charging  it  to  some  correspondent ;  (3)  by  having  it  certified,  and 
sending  it  through  the  clearing  house ;    (4)  by  charging  it  to  the  depositor's  account. 

Charging  a  Depositor  with  a  Note.  If  a  note  is  made  payable  at  a  bank,  it  is  held 
by  the  negotiable  instruments  law,  and  several  supreme  court  decisions,  that  it  is  an 
order  on  the  bank,  and  that  the  bank  at  which  it  is  made  payable  has  a  right  to  charge 
it  to  the  depositor's  account  on  the  day  on  which  it  falls  due. 

The  negotiable  instruments  law  has  been  adopted  in  New  York,  Connecticut,  Massachusetts,  Mary- 
land, Florida,  Virginia,  and  Colorado. 

Among  the  supreme  court  decisions  sustaining  this  view  are  the  following: 

Pennsylvania  (Commercial  National  Bank  vs.  Henriinger,  105  Pa.  St.  496);  Indiana  (Bedford  Rank 
vs.  Acoaron,  125  Ind.  584);  New  York  (yEtna  National  Bank  vs.  Fourth  National  Bank,  1<>  N.  Y.  82). 
The  decisions  of  some  other  state  courts  are  conflicting.  In  case  of  doubt,  it  is  better  to  have  the  maker 
give  bis  check  lor  the  note. 

An  accepted  draft  payable  at  a  certain  bank  would  come  under  the  same  rule  as  a  note. 

As  note  teller,  you  will  attend  to  the  collection  of  paper  due  to-day.  Your  work 
will    he    found    under   memorandum    marked  "Note  Teller's   Work,   Dec.   17."     The 


56  MODERN   ILLUSTRATIVE   BANKING 

envelope  marked  "Note  Teller's  Drawer,"  which  will  be  found  among  your  miscel- 
laneous supplies,  will  be  used  to  preserve  the  daily  work  of  this  department. 

The  following  notes  were  handed  over  from  the  discount  department :  Nos.  439, 
368,  390.  Find  these  papers  in  the  envelope  marked  "Note  Teller's  Work  for  Dec.  17," 
and  see  if  the  numbers  correspond. 

.  No.  40.  This  is  from  Bank  of  Monroe  in  payment  for  discount  No.  439.  Put  the 
money  in  the  Note  Teller's  Drawer.  Indorse  the  note  over  to  Bank  of  Monroe  (see  form 
under  transaction  No.  46),  and  put  it  in  your  envelope  for  outgoing  papers.  Turn  to 
the  discount  tickler,  check  the  amount,  and  write  Paid  12/17  in  the  Remarks  column. 

No.  41.  From  James  P.  Kennedy  &  Son  for  No.  368.  Put  the  money  in  the  Note 
Teller's  Drawer ;  cancel  the  note  and  put  it  in  your  envelope  for  outgoing  papers. 

No.  42.  From  Traders  National  Bank  in  payment  for  discount  No.  390.  Proceed 
as  instructed  in  No.  40. 

The  following  paper  was  handed  over  from  the  collection  clerk's  department: 
Nos.  592,  596,  588,  565.  Find  these  papers  in  the  envelope  marked  "Note  Teller's 
Work,  Dec.  17,"  and  see  if  numbers  agree. 

No.  43.  No.  596  should  be  marked  Charge  K.  B.  $•  Co.,  12/17  in  the  Remarks 
column  of  the  collection  tickler.  Cancel  the  draft  and  put  it  in  the  envelope  for 
outgoing  papers. 

No.  44.  This  amount,  8240.56,  is  from  W.  W.  Osgood  &  Co.,  in  payment  for  col- 
lection No.  592  and  interest.     Your  bank  charges  25  $  for  collection. 

Credit  Collection  and  Exchange  in  the  general  cash  book.  Write  Paid  12/17 ;  our 
coll.  25$  in  the  Remarks  column  of  the  collection  tickler.  Cancel  the  note  and  place 
it  in  envelope  for  outgoing  papers.     Place  the  cash  in  the  Note  Teller's  Drawer. 

No.  45.  This  amount,  $1500,  is  in  payment  for  collections  Nos.  588  and  565.  Write 
Paid  12/17  in  the  Remarks  column  of  the  collection  tickler.  Cancel  each  note,  and  place 
it  in  the  envelope  for  outgoing  papers.     Place  the  cash  in  the  Note  Teller's  Drawer. 

No.  46.  This  amount,  $2948.29,  is  for  city  cash  paper  which  you  have  collected. 
It  is  in  payment  of  the  following  checks : 

Chas.  M.  Harrison,  $162.65 

Chas.  W.  Gray  &  Co.,  1249.62 

The  Knowlton  Paper  Box  Co.,  1264.52 

Warriner  &  Co.,  121.50 

Kelley,  Jones  &  Co.,  150.00 

Find  these  checks  in  "  Note  Teller's  Work,  Dec.  17,"  and  indorse  them  as  follows : 

Pay  to  the  order  of 
(Name  of  bank  on  which  drawn) 
First  National  Bank, 
R.  R.  Rockwood,  Cashier. 

Per  (your  name). 

Place  them  in  the  envelope  for  outgoing  papers.     It  is  assumed  that  bank  messengers 
brought  in  the  money  for  these  checks  from  the  banks  on  which  they  are  drawn. 


MAIL    CLERKS    WORK  57 

Count  your  cash.  You  should  have  on  hand  120,938.85.  Put  this  in  a  blank 
envelope,  and  on  the  outside  write  From  Note  Teller  to  Paying  Teller,  Bee.  17.  Place 
this  envelope  in  Paying  Teller's  Drawer. 

MAIL   CLERK'S    WORK 
Monday,  December  17 

Duties.  The  mail  clerk  usually  keeps  an  account  with  his  bank's  dealings  with 
out-of-town  banks.  He  handles  all  remittances  of  cash  items,  either  to  or  from  these 
banks.  In  this  way  such  items  are  kept  entirel}*  separate  from  the  collections  which 
are  handled  by  the  collection  clerk. 

This  work  will  be  found  under  memorandum  marked  "Mail  Clerk's  Work,  Dec. 
17."  All  papers  received  to  be  retained  by  you  should  be  placed  in  Mail  Clerk's 
Drawer,  which  will  be  found  among  your  miscellaneous  supplies. 

No.  47.     This  is  from  your  correspondent  at  Lyons,  N.Y.     Proceed  as  follows: 
(a)    Compare  the  items  enumerated  in  the  letter  with  the  accompanying  vouchers, 

checking  the  amounts  in  the  letter  with  a  pencil  if  they  agree. 

(5)    Add  the  columns  of  the  letter,  and  if  found  correct,  place  the  vouchers  and 

the  letter  in  your  Mail  Clerk's  Drawer. 

No.  48.     This  is  from  your  Buffalo  correspondent.     Handle  the  same  as  No.  47. 

No.  49.     This  is  from  your  Philadelphia  correspondent. 

Take  the  papers  out  of  the  Mail  Clerk's  Drawer,  and  proceed  as  follows : 

(a)  Take  all  the  letters  you  have  received  from  correspondents  and  from  them 
enter  the  total  amounts  to  be  credited  to  the  different  banks  in  your  remittance  register 
(see  form,  pages  30  and  31).     Place  the  letters  in  the  Letter  File. 

(b)  In  the  envelope  marked  "Mail  Clerk's  Work,  Dec.  17,"  you  will  find  a  number  of 
checks,  drafts,  etc.,  handed  over  from  the  receiving  teller,  paying  teller,  and  note  teller, 
to  be  sent  away  to  other  banks.  Take  these  out  and  sort  them,  putting  all  those  to 
be  sent  to  any  particular  bank  together,  and  enter  them  in  your  remittance  register. 
Remember  to  itemize  in  this  book  everything  that  is  sent  away.  Remittances  that  we 
receive  need  not  be  itemized,  as  the  letters  containing  remittances  can  be  filed  away 
fur  reference. 

Whenever  you  remit  paper  for  credit,  be  sure  to  send  checks  in  the  vicinity  of 
Troy,  N.Y. ,  to  Commercial  National  Bank,  Troy ;  checks  in  the  vicinity  of  Buffalo, 
X.Y..  to  Traders  National  Bank,  Buffalo;  and  so  on.  Checks  on  banks  in  other  places 
near  you,  but  not  in  the  vicinity  of  your  regular  correspondents,  should  be  scut  direct 
to  the  banks  on  which  they  are  drawn,  with  the  request  that  proceeds  be  remitted  by 
New  York  draft.  Accounts  will  have  to  be  opened  with  these  banks,  although  they 
are  not  regarded  as  regular  correspondents.  Send  the  checks  on  Syracuse  hank  to 
Troy,  X.Y.;  send  the  Peekskill  check  and  the  New  Haven  check  t<>  Chemical  National 
Bank;  send  tin-  Oswego  check  direct  to  Central  National  Rank,  Oswego  (cashier, 
George  W.  Savage);   send  all  the  other  papers  to  regular  correspondents. 


58 


MODERN    ILLUSTRATIVE    BANKING 


Make  the  body  of  your  letter  to  the  Oswego  bank  read:  "I  inclose  for  collection 
and  immediate  returns  the  items  stated  below." 


Form  of  Advice  of  Remittance  of  Cash  Items 


GEORGE   W.  THAYER,    PRESIDENT. 
W.  B.  SMITH,  Cashier. 


HENRY    C.    BREWSTER,  ViCE-PRESiOENT. 
BYRON    D.  McALPINE,  Vice-President. 


CAPITAL,  $150,000. 


€tn/& 


'*S^?-ft   -/&  — 


Dear  Sir  : 


I  enclose  for  credit  to  our  account  items  as  stated  below. 
Very  respectfully, 

W.  B.  SMITH,  Cashier. 


'/-£L 


/ 


f~ 


_Z 


f- 


/a 


r 


ON   WHOM   DRAWN. 


'^^/ 


7s^Z^7-V-£^?->. 


/-x^r   J^^^t~Ar2^7?-ff-0i/^t. 


C^U^7^ 


Total 


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/  2-0  0 


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£_&. 


6  (7  P 


2-t7  /?  tf 


~7 


After  making  the  entries  in  the  remittance  register,  write  letters  to  the  different 
banks.  Use  blanks  which  you  will  find  among  your  miscellaneous  supplies.  (See 
form  of  letter  of  remittance  above.) 

After  writing  the  letters,  indorse  the  various  items  that  are  to  be  sent  as 
follows  : 


INDIVIDUAL  BOOKKEEPER'S    WORK  59 

Pay  to  the  order  of 

(Name  of  bank) 

(Address) 

First  National  Bank, 

Rochester,  N.Y., 

R.  R.  Rockwood,  Cashier, 

Per  (your  name). 

(a)  Compare  the  items  very  carefully  with  the  amounts  shown  in  the  letters,  after 
which  compare  the  letters  with  the  items  shown  in  the  remittance  register.  If  they 
agree,  put  the  remittances  in  the  letters,  direct  the  letters  to  the  proper  banks,  and 
hand  them  to  your  teacher  for  approval.  After  he  has  approved  the  letters  and  re- 
turned them  to  you,  place  them  in  your  envelope  for  outgoing  papers. 

(b)  Next  take  your  draft  book,  tilled  out  by  you  as  paying  teller,  and  foot  and  rule 
it.  Carry  the  footing  of  the  Face  column  to  the  credit  of  Chemical  National  Bank  in 
your  remittance  register,  and  the  footing  of  the  Exchange  column  to  the  credit  of 
Collection  and  Exchange  on  the  left-hand  side  of  the  general  cash  book. 

(c)  Turn  to  the  collection  tickler.  Under  Dec.  12,  No.  531,  is  marked.  Charge 
C.N.B.  12/17 ;  bank's  coll.  50  $.  This  means  that  the  Commercial  National  Bank  has 
reported  the  collection  of  that  amount,  and  that  it  should  be  charged  for  the  amount, 
less  50^.    Charge  Commercial  National  Bank  in  the  remittance  register  for  the  proceeds. 

Treat  No.  569  in  a  similar  manner. 

((T)  Take  three  slips  of  paper  and  write  From  Mail  Clerk  upon  them.  Fasten  a 
slip  around  the  checks  on  our  bank,  and  place  them  in  the  Individual  Bookkeeper's 
Work,  Dec.  17. 

(e )   Place  the  checks,  if  anj^,  on  out-of-town  banks  in  Mail  Clerk's  Work,  Dec.  17. 

(/)  Place  the  checks,  drafts,  etc.,  payable  in  the  city  in  Note  Teller's  Drawer. 

(#)  Turn  to  your  discount  tickler.  Under  Dec.  17  discounts  Nos.  369  and  300  are 
marked  Charge  T.N.B.     Charge  Traders  National  Bank  with  each  of  these  discounts. 

(Ji)   Rule  and  foot  the  remittance  register. 

INDIVIDUAL    BOOKKEEPER'S    WORK 

Monday,  December  17 

Duties.  The  individual  bookkeeper  has  charge'  of  the  accounts  with  depositors.  In 
many  banks  there  are  several  individual  bookkeepers,  the  individual  ledgers  being  sub- 
divided in  consequence  of  the  large  number  of  accounts  therein.  The  individual 
bookkeeper  should  be  rapid  and  accurate  in  figures,  should  write  a  good,  plain,  business 
hand,  and  possess  a  great  deal  of  patience,  for  it  is  generally  his  duty  to  meet  main  <>i 
the  depositors  of  the  bank  and  answer  numerous  questions  regarding  their  accounts. 
No  mention  of  anything  regarding  a  depositor's  account  should  be  made  to  any  one 
outside  of  the  bank,  other  than  the  depositor  or  his  representative.  The  depositor's 
bank  book  is  usually  balanced  by  this  clerk. 


60  MODERN    ILLUSTRATIVE    BANKING 

As  individual  bookkeeper,  you  should  now  turn  to  the  envelope  marked  "  Indi- 
vidual Bookkeeper's  Work,  Dec.  17th." 

(a)  Sort  the  checks  into  piles  arranged  in  the  alphabetical  order  of  the  names  of 
.the  drawers. 

(b~)  Begin  with  the  letter  B  and  enter  the  checks  in  the  Checks  in  Detail  column 
of  the  individual  ledger  (see  form,  page  34  a).  When  you  have  entered  the  checks 
under  B,  take  up  those  under  C  and  proceed  in  the  same  manner.  As  you  enter  the 
checks,  place  them  face  downward  in  a  pile  so  that  when  you  have  finished  the  last 
check  you  have  entered  is  on  the  top  of  the  pile. 

(<?)  After  you  have  entered  all  the  checks,  compare  them  very  carefully  with  the 
items  in  the  individual  ledger  ;  if  they  agree,  fasten  the  checks  together  with  a  slip  of 
paper  and  place  them  in  your  envelope  for  outgoing  papers. 

Banks  usually  file  customers'  canceled  checks  in  a  series  of  drawers,  subdivided 
by  pasteboard  partitions  having  the  names  of  the  depositors  written  thereon.  When 
the  customer's  pass  book  is  written,  these  canceled  vouchers  are  returned  to  him. 

Checks  are  canceled  in  regular  banking  houses  by  the  tellers  (see  form,  page  19). 
They  are  also  canceled  in  some  form  by  the  individual  bookkeeper.  He  usually  cuts 
the  word  "  Paid "  through  the  check  with  a  machine  provided  for  this  purpose. 

(d)  Turn  to  the  certified  check  book  and  foot  it  (see  form,  page  32).  Credit 
Certified  Cheeks  for  the  total  in  the  Deposits  column  of  the  individual  ledger.  Next 
debit  the  drawers  of  the  checks  in  the  Checks  in  Detail  column  of  the  individual  ledger 
for  the  proper  amounts.     Check  each  item  and  the  total  as  they  are  posted. 

(e)  Turn  to  the  discount  and  collection  ticklers,  and  enter  the  notes  charged  to 
depositors  to  the  debit  of  each  depositor  in  the  Checks  in  Detail  column  of  the  indi- 
vidual ledger.  Under  this  date  there  are  no  charges  in  the  discount  tickler  against 
depositors ;  in  the  collection  tickler  there  is  a  charge  against  Keeler,  Boynton  &  Co. 
Check  the  item.     (This  charge  might  have  been  made  from  the  canceled  draft.) 

(/)  Ascertain  the  totals  of  the  checks  after  the  various  names  in  the  individual 
ledger,  and  carry  the  amounts  into  the  Total  Checks  column.  Next  foot  the  Checks 
in  Detail  and  the  Total  Checks  columns  in  pencil.     The  totals  should  agree. 

(#)  Take  the  deposit  tickets  from  Individual  Bookkeeper's  Work,  Dec.  17th, 
and  enter  the  amounts  of  them  opposite  the  proper  names  in  the  Deposits  column 
of  the  individual  ledger. 

(A)  Fasten  the  deposit  tickets  together,  and  place  them  in  your  envelope  for 
outgoing  papers.  In  actual  business  these  deposit  tickets  would  be  filed  away  by  the 
bank  in  some  systematic  way. 

( i)  Turn  tp  the  discount  register.  The  items  in  the  Proceeds  column  should  be 
credited  in  the  individual  ledger  to  the  persons  for  whom  discounted.  Write  the 
amounts  above  the  other  deposits  in  cases  where  deposits  have  already  been  made 
to-day.  Place  the  letter  "  d  "  against  the  amount,  to  show  that  it  comes  from  the  pro- 
ceeds of  paper  discounted  to-day.     Check  the  items  posted. 

(,?')  Turn  to  the  collection  tickler.  No.  531  under  Dec.  12  was  collected  for 
Fidelity  Mfg.  Co.  and  the  proceeds  should  be  placed  to  their  credit  in  the  Deposits 
column  of  the  individual  ledger.     Place  the  letter  "  c  "  before  the  amount,  to  show  that 


GENERAL  BOOKKEEPER'S  WORK  61 

it  comes  from  the  collection  tickler.     Check  the  amount  in  the  column  entitled  "  Ck." 
in  the  collection  tickler. 

(&)   No.  569  should  be  credited  to  Black,  Adler  &  Co.  in  the  same  manner. 

(Z)  Under  Dec.  17th  in  the  collection  tickler  there  are  four  collections  settled. 
Credit  the  persons  for  whom  these  items  are  collected  in  the  Deposits  column  of  the 
individual  ledger.  Where  a  note  is  interest-bearing,  be  sure  to  add  the  interest  to  the 
face  before  deducting  the  collection  and  exchange.     Check  the  items  transferred. 

(m)    Foot  the  columns  of  the  individual  ledger  (see  form,  page  34  a). 

(?t)  Extend  the  balances  in  the  individual  ledger,  as  follows :  add  the  total  deposits 
to  the  old  balance,  and  from  the  sum  subtract  the  total  checks ;  the  remainder  will  be 
the  new  balance.  When  an  account  is  overdrawn,  the  overdraft  should  be  written  in 
red  ink. 

Foot  the  Balance  column  and  prove  the  individual  ledger.  The  difference  between 
the  Balance  column  for  Saturday  and  the  Balance  column  for  to-day  should  equal  the 
difference  between  the  Total  Checks  and  Deposits  columns  for  to-day.  If  the  Balance 
column  shows  that  there  have  been  overdrafts,  the  amounts  of  the  overdrafts  should  be 
omitted  in  footing  the  black  ink  balances,  and  their  sum  written  below  the  black  ink 
total.     In  proving,  the  red  ink  total  must  be  subtracted  from  the  black  ink  total. 


GENERAL    BOOKKEEPER'S   WORK 

Monday,  December  17 

Duties.  The  general  bookkeeper  has  personal  charge  of  the  general  ledger  and  is 
required  to  make  out  statements  exhibiting  the  bank's  condition  from  time  to  time. 
He  must  be  familiar  with  the  method  of  accounting  employed  in  every  department  of 
bank  work,  as  it  is  all  more  or  less  under  his  supervision.  He  should  be  absolutely 
accurate  in  his  accounts,  and  able  at  all  times  to  furnish  a  complete  statement  of  the 
bank's  affairs  within  a  few  hours.  He  is  regarded  by  many  as  standing  an  equal  chance 
with  the  paying  teller  for  promotion. 

As  general  bookkeeper,  you  will  now  write  up  the  general  cash  book  for  the 
day's  business.      Proceed  as  follows  : 

(a)  Turn  to  the  discount  register,  and  carry  the  footing  of  the  Amount  column  to 
the  debit  of  Bills  Discounted  on  the  right-hand  side  of  the  general  cash  book,  and  the 
footing  of  Interest  and  Discount  and  Collection  and  Exchange  columns  to  the  credit 
of  those  accounts  on  the  left-hand  side  of  the  general  cash  book  (see  form,  pages  '1 1 
and  25).      Check  the  totals  transferred. 

(6)  Turn  to  the  discount  tickler  under  date  of  Dec.  17.  You  will  find  that  all 
paper  due  to-day  has  either  been  paid  in  cash  or  is  to  be  charged  to  the  bank  to  which 
it  was  sent  for  collection.  Foot  the  money  column  of  the  discount  tickler  for  Dec. 
17,  and  credit  Bills  Discounted  on  the  left-hand  side  of  the  general  cash  book  for  the 
total.     Check  the  total  transferred. 

(c)  Carry  the  footing  of  Deposits  column  in  the  individual  ledger  to  the  credit 
of  Deposits  account  on  the.  left-hand  side  of  the  general  cash  book,  and  the  footing  of 


62  MODERN    ILLUSTRATIVE    BANKING 

Total  Checks  column  to  the  debit  of  Deposits  account  on  the  right-hand  side  of  the 
general  cash  book.     Check  the  totals  transferred. 

(d)  Carry  the  total  of  the  Debit  column  of  the  remittance  register  to  the  right- 
hand  side  of  the  general  cash   book,  as  follows:    Remittance   Register,   total  for  day, 

$ ..     Check  this  item  in  the  Folio  column  of  the  general  cash  book,  as  it  is  not 

to  be  posted.  Carry  the  footing  of  the  Credit  column  of  the  remittance  register  to  the 
left-hand  side  of  the  general  cash  book  in  the  same  manner.  Do  not  forget  to  check  the 
item  on  this  side. 

(e)  Prove  your  cash.  The  difference  between  the  sides  of  your  general  cash  book 
should  equal  the  amount  in  the  hands  of  the  paying  teller,  plus  the  total  of  city  checks, 
etc.,  in  the  hands  of  the  note  teller.  The  balance  of  the  cash  book  should  b(.  C 354,135.66. 
If  everything  proves,  foot  and  rule  the  general  cash  book  (see  form,  pages  24  and  25). 

(/)  Post  the  cash  book  to  the  general  balance  ledger  just  as  you  would  an  ordinary 
cash  book.  Post  only  the  total  of  the  Collection  and  Exchange  column.  Post  the 
total  cash  receipts  to  the  debit,  and  the  total  payments  to  the  credit  of  Cash  account 
in  the  general  balance  ledger. 

(g)  Post  the  Debit  and  Credit  columns  of  the  remittance  register  to  the  general 
balance  ledger. 

(li)  Extend  the  balances  on  the  general  balance  ledger  (see  form,  page  35).  The 
debit  balances  should  be  written  in  red  ink,  and  the  credit  balances  in  black.  The 
sum  of  the  red  ink  balances  should  at  all  times  equal  the  sum  of  those  written  in  black. 

The  work  for  Dec.  17  is  now  completed.  Submit  your  work  to  your  teacher  for 
examination  and  approval. 


PART   III.     BANK   ACCOUNTING   (Without  Vouchers) 

GENERAL    INSTRUCTIONS 

The  following  transactions  are  designed  to  give  the  stndent  additional  practice  in 
bank  bookkeeping,  without  the  inconvenience  of  the  actual  use  of  the  numerous  papers 
and  currency  required  for  the  full  illustration  of  a  day's  work,  as  shown  in  the  trans- 
actions of  Dec.  17. 

In  performing  the  work  of  Dec.  18,  the  student  should  take  care  to  follow  exactly 
the  instructions  of  the  text,  and  to  consult  freely  the  books  of  Dec.  17,  where  similar 
transactions  will  be  found  properly  recorded. 

RECEIVING    TELLER'S    WORK 
Tuesday,  December  18 

The  following  deposits  have  been  received. 

As  you  will  not  receive  the  deposit  tickets  in  the  transactions  given  below,  you  may 
write  the  name  of  each  depositor  on  a  sheet  of  journal  paper,  and  opposite  each  name 
write  the  amount  of  the  deposit  ;  at  the  top  of  the  sheet  write  From  Receiving  Teller  to 
Individual  Bookkeeper,  Dec.  18.  Preserve  this  list,  as  from  it  entries  will  be  made 
in  the  individual  ledger  while  performing  the  work  of  the  individual  bookkeeper. 

No.  50.  Martin  Bros.,  -$4446.74.  Collection  and  exchange,  25^.  Short-extend 
Collection  and  Exchange  in  the  general  cash  book,  and  deduct  25^  from  the  amount  of 
the  deposit. 

No.  51.     Black,  Adler  &  Co.,  $2720. 

No.  52.     Geo.  W.  Miner  &  Co.,  $58276. 

No.  53.     Walter  II.  Wood,  $1561.10. 

No.  54.     Keeler,  Boynton  &  Co.,  $1179.37. 

No.  55.  F.  R.  Tremlin  has  given  you  $4590  for  a  certificate  of  deposit.  Write 
Certificate  of  Deposit  on  your  list  of  deposits.  Issue  a  certificate  of  deposit  as 
explained  in  connection  with  No.  9,  page  43. 

No.  56.     Moses  Coit  &  Co.,  $12000. 

No.  57.     C.  W.  Beach  &  Bros.,  $6781. 

No.  58.     L«»rd  &  Taylor,  $1422. 

No.  5i).  Win.  W.  Fox  has  given  you  $1060  for  a  certificate  of  deposit.  Follow 
the  instruct  ions  for  No.  55. 

No.  60.     Cl.;ts.  M.  Deville,  $421.62.     Collection  and  exchange,  $1.00.     Follow  the 

instructions  for  No.  50. 

63 


64  MODERN   ILLUSTRATIVE    BANKING 

No.  61.  Fidelity  Mfg.  Co.,  $3266.68.  Collection  and  exchange,  $1.00,  paid  in 
cash.  Make  an  entry  for  the  collection  and  exchange  in  the  general  cash  book,  but  do 
not  deduct  the  charge  from  the  amount  of  the  deposit. 

No.  62.     Ballantine  Bros.  &  Co.,  $2940.40.     Collection  and  exchange,  $1.00. 

No.  63.     C.  W.  Washburn,  $775.40.     Collection  and  exchange,  50^. 

No.  64.     A.  B.  Curtis  &  Co.,  $4625. 

You  have  on  hand  currency  aggregating  $16,154,  which  you  turn  over  to  the  paying 
teller. 

PAYING    TELLER'S    WORK 

Tuesday,  December  18 

The  following  checks  and  drafts  have  been  paid. 

Record  the  checks  drawn  on  our  bank  (excepting  checks  presented  for  certification) 
on  a  sheet  of  journal  paper,  writing  the  name  of  each  customer,  and  opposite  the  name 
the  amounts  of  the  checks  with  which  lie  is  to  be  charged.  At  the  top  of  the  sheet 
write  From  Paying  Teller  to  Individual  Bookkeeper,  Dec.  18.  These  checks  will  be 
entered  in  the  individual  ledger  while  performing  the  work  of  the  individual  book- 
keeper. 

No.  65.     Check  of  Buffalo,  Rochester  &  Pittsburg  R.  R.  Co.  on  our  bank  for  $650. 

No.  66.  Check  of  Masten  &  Wolven  on  Farmers  National  Bank,  Philadelphia,  for 
$126.50,  indorsed  by  R.  B.  Traver ;  collection  and  exchange,  30^.  Credit  Collection 
and  Exchange  in  the  general  cash  book. 

No.  67.  Draft  of  Bradford  National  Bank,  Bradford,  Pa.,  on  Quaker  City  National 
Bank,  Philadelphia,  for  $420.62,  indorsed  by  C.  B.  Moore.  No  entry  required  at  this 
time  ;  you  will  send  the  draft  away  for  credit  while  performing  the  work  of  the  mail  clerk. 

No.  68.  Chas.  B.  Pease  has  given  you  cash,  $1562.50,  in  payment  for  New  York 
draft  and  exchange.     Face  of  draft,  $1560;  exchange,  $2.50. 

Write  the  draft  and  make  the  proper  record  on  the  stub  of  the  draft  book. 
Exchange  on  New  York  drafts  should  not  be  entered  in  the  general  cash  book  until 
the  close  of  the  day. 

No.  69.  Fidelity  Mfg.  Co.  has  presented  its  check  on  our  bank  for  certification. 
Amount  of  check,  $1262.75.     Make  an  entry  in  the  certified  check  book. 

No.  70.  C.  W.  Washburn  has  presented  his  check  on  our  bank  for  certification. 
Amount  of  check,  $1200. 

No.  71.  Check  of  Geo.  W.  Miner  &  Co.  on  our  bank  for  $1202,  in  payment  for 
New  York  draft  and  exchange*  Face  of  draft,  $1200;  exchange,  $2.00.  Enter  on 
the  stub  of  draft  book ;  also  write  the  draft. 

No.  72.  Check  of  A.  B.  Curtis  &  Co.  on  our  bank  for  $1261.52,  in  payment  for 
New   York  draft  for  the  same  amount.     Exchange,  $2.50,  paid  in  cash. 

No.  73.  Check  of  Lord  &  Taylor  on  our  bank  for  $200,  in  payment  for  New  York 
draft  for  the  same  amount.     Exchange,  25^,  paid  in  cash. 

No.  74.  Check  of  Moses  Coit  &  Co.  on  our  bank  for  New  York  draft  and  exchange. 
Face  of  draft.  $1500  ;   exchange.  $3.00.  t 


DISCOUNT    CLERK'S    WORK  65 

Xo.  75.     Check  of  Black,  Adler  &  Co.  on  our  bank  for  $100. 

Xo.  76.     Check  of  Walter  H.  Wood  on  our  bank  for  $50. 

Xo.  77.  Cheek  of  C.  W.  Beach  &  Bros,  on  our  bank  in  payment  for  New  York 
draft  for  $1200.     Exchange,  $2.50,  paid  in  cash. 

Xo.  78.  II.  W.  Klinck  has  presented  for  certification  check  of  Chas.  M.  Deville 
for  $1500,  payable  at  our  bank.     Enter  in  the  certified  check  book. 

Xo.  79.  Check  of  F.  F.  Findlay  on  Commercial  National  Bank,  Troy,  N.Y.,  for 
$750,  indorsed  by  E.  E.  Frey ;  collection  and  exchange,  $1.50.  Do  not  forget  to  credit 
Collection  and  Exchange  in  the  general  cash  book. 

Xo.  80.     The  following  cheeks  have  been  presented  for  payment  by  a  messenger 
from  the  Bank  of  Monroe,  City.     Pay  the  total  amount  by  New  York  draft. 
Check  of  Black,  Adler  &  Co.  on  our  bank  for  $1579.25. 
Check  of  Ballantine  Bros.  &  Co.  on  our  bank  for  $126.59. 
Check  of  Lord  &  Taylor  on  our  bank  for  $128.72. 
Write  the  draft  and  make  the  proper  record  on  the  stub  of  the  draft  book. 

Xo.  81.  The  following  checks  have  been  presented  for  payment  by  a  messenger 
from  Traders  National  Bank,  City.     Pay  the  total  amount  by  New  York  draft. 

Check  of  Keeler,  Boynton  &  Co.  on  our  bank  for  $150. 

Check  of  Walter  H.  Wood  on  our  bank  for  $200. 

A  Cashier's  Check  is  the  same  as  an  ordinary  check  in  every  way,  except  that 
it  is  signed  by  the  cashier  of  a  bank.  Such  checks  are  many  times  issued  for  the 
payment  of  the  general  expenses  of  a  bank,  notes  discounted  for  cash,  etc. 

Xo.  82.  Wetmore,  Rauber  &  Co.  have  presented  their  bill  for  office  desk,  $95. 
Pay  the  same  by  cashier's  check. 

Turn  to  your  book  of  cashier's  checks,  write  a  check  in  favor  of  Wetmore,  Rauber 
&  Co.,  and  make  the  proper  record  on  the  stub.  Number  the  check  115.  Debit 
Furniture  and  Fixtures  on  the  right-hand  side  of  the  general  cash  book. 

The  total  amount  of  currency  now  in  the  hands  of  the  paying  teller  is  $367,188.04. 
This  amount  includes  the  cash  received  from  receiving  teller  to-day  ($16,154)  and 
cash  on  hand  in  Paying  Teller's  Drawer  Dec.  17  ($351,5(51.61). 

DISCOUNT   CLERK'S    WORK 
Tuesday,  Deeei)d>er  18 
The  following  paper  has  been  discounted. 

No.  8:j.  For  Geo.  W.  Miner  &  ('<».,  draft  of  J.  1'.  Parsons  &  Co.  for  $9500,  payable 
at  (.in-  hank  30  days  from  Dec.  1  ;   discounted  at  6%. 

I  •  .ant  the  exact  number  of  days  from  Dec.  L8  to  the  date  of  maturity  and  find 
the  discount.     Make  tin-  proper  entries  in  discount  register. 

No.  84.     For  Walter  H.  Wood,  note  of  Lord  &  Taylor  for  $8250,  payable  at  our 

bank   2  months  from  Nov.  7;    discounted  at   6%. 

No.  85.  for  Fidelity  Mfg.  Co.,  note  of  Lord  &  Taylor  for  87500,  payable  at  our 
bank  30  days  from  Dec.  7  ;  disc ited  at  »;%. 

BANKING  —  5 


66  MODERN    ILLUSTRATIVE    BANKING 

No.  86.  For  C.  W.  Beach  &  Bros.,  note  of  Hathaway  &  Hall  for  $1000,  indorsed 
by  B.  B.  Babbitts  &  Son,  payable  at  Commercial  National  Bank,  Troy,  N.Y.,  1  month 
from  Dec.  7.     Discounted  at  6%  ;  collection  and  exchange,  $1.50. 

No.  87.  For  Ballantine  Bros.  &  Co.,  note  of  Howard  &  Endrews  for  $2450,  indorsed 
by  Morgan  &  Benedict,  payable  at  Commercial  National  Bank,  Troy,  N.Y.,  30  days 
from  Dec.  8.     Discounted  at  6%  ;  collection  and  exchange,  $4.50- 

Foot  and  rule  your  discount  register. 

If  a  note  is  discounted  for  some  one  who  is  not  a  depositor,  Sundry  Discounts  should  be  credited  in 
the  individual  ledger  for  the  proceeds.  Such  notes  should  be  entered  in  the  discount  register  the  same  as 
notes  offered  for  discount  by  regular  depositors,  and  S.  D.  should  be  written  in  red  ink  after  the  name  of 
the  person  or  firm  in  the  For  Whom  Discounted  column.  The  persons  offering  paper  for  discount  in 
this  manner  usually  draw  in  cash  the  proceeds  of  the  notes  at  the  time  they  are  discounted.  This  may 
be  done  by  check  or  receipt,  the  latter  being  commonly  used. 

Some  banks  credit  Cashier's  Account  for  the  proceeds  of  notes  discounted  for  persons  other  than 
depositors.     In  such  cases,  the  cashier  always  issues  a  check  to  the  discounter. 

From  the  discount  register  make  the  proper  entries  in  the  discount  tickler. 

The  following  discounted  paper  has  been  sent  away  for  collection.  Nos.  457  and 
458  to  Commercial  National  Bank,  Troy.  Make  the  proper  entries  in  the  To  Whom 
Sent  column  of  the  discount  tickler. 

All  paper  payable  at  out-of-town  banks  maturing  to-day  should  be  marked  Charge 
and  the  initials  of  the  bank  to  be  charged  in  the  Remarks  column  of  the  discount  tickler. 

COLLECTION    CLERK'S    WORK 
Tuesday,  December  18 

The  following  paper  has  been  received  for  collection.  Enter  the  items  in  the  col- 
lection register. 

No.  88.  From  Chas.  M.  Deville,  sight  draft  on  Raymond  Bros,  for  $260.10,  dated 
Dec.  18,  payable  at  Philadelphia. 

No.  89.  From  Walter  H.  Wood,  sight  draft  on  Gray,  Morgan  &  Co.  for  $1200, 
dated  Dec.  18,  payable  at  Philadelphia. 

No.  90.  From  Keeler,  Boynton  &  Co.,  sight  draft  on  Smith,  Perkins  &  Co.  for 
$2142.16,  dated  Dec.  18,  payable  at  Buffalo. 

No.  91.  From  Black,  Adler  &  Co.,  sight  draft  on  D.  M.  Garson  &  Co.  for  $642.68, 
dated  Dec.  18,  payable  at  Buffalo. 

No.  92.  From  Fidelity  Mfg.  Co.,  note  of  A.  S.  Warner  for  $152.16,  payable  at  our 
bank  10  days  from  Dec.  10. 

No.  93.  From  Martin  Bros.,  note  of  Wm.  J.  Amos  &  Co.  for  $200,  payable  at  Bank 
of  Monroe,  City,  15  days  from  Dec.  15. 

The  following  paper  has  been  received  from  other  banks  for  collection. 

No.  94.  From  Farmers  National  Bank,  Philadelphia,  sight  draft  on  E.  M.  Mills 
&  Son  for  $500,  dated  Dec.  12,  payable  at  Rochester,  indorsed  by  Geo.  W.  Schwartz  ; 
sight  draft  on  Baker  Bros.  &  Co.  for  $652.17,  dated  Dec.  14,  payable  at  Rochester, 
indorsed  by  Halliday  &  Halliday  ;  acceptance  of  Thomas  M.  Pratt  &  Son  for  $320.50, 


NOTE   TELLER'S    WORK  67 

payable  at  Bank  of  Monroe,  City,  30  clays  from  Dec.  10,  indorsed  by  M.  D.  Klett ;  note 
of  Myron  T.  Carey  for  $900,  payable  at  Bank  of  Monroe,  City,  30  days  from  Dec.  8, 
with  interest  at  6%,  indorsed  by  W.  W.  Catchpole. 

No.  95.  From  Wayne  County  National  Bank,  L}Tons,  note  of  Chas.  M.  Deville 
for  $1200,  payable  at  our  bank  15  days  from  Dec.  10,  with  interest  at  6%,  indorsed  by 
Geo.  T.  Milem  &  Co. ;  note  of  Walter  H.  Wood  for  $400,  payable  at  our  bank  1  month 
from  Dec.  1,  indorsed  by  R.  E.  Gallagher;  sight  draft  on  Morrison  &  Henry  for  $1000, 
dated  Dec.  17,  payable  at  Rochester,  indorsed  by  Michael  M. -Winters. 

No.  96.  From  Traders  National  Bank,  Buffalo,  acceptance  of  C.  M.  DeCarr  for 
$600.  payable  at  Bank  of  Monroe,  City,  1  month  from  Dec.  3,  indorsed  by  C.  C.  Cooper 
&  Bro.  ;  note  of  Steefel,  Moll  &  Co.  for  $126.52,  payable  at  Bank  of  Monroe,  City,  1 
month  from  Dec.  1,  indorsed  by  Briggs,  Hinman  &  Co.  ;  sight  draft  on  B.  K.  Munn  & 
Co.  for  $500,  dated  Dec.  15,  payable  at  Rochester,  indorsed  by  T.  B.  Welch. 

From  the  collection  register  make  the  proper  entries  in  the  collection  tickler. 
Paper  payable  at  sight  should  be  entered  under  Dec.  18,  unless  time  is  allowed  for 
the  collection  of  such  paper,  in  which  case  it  should  be  entered  under  the  estimated 
date  of  collection.  For  example  :  A  sight  draft,  dated  Dec.  17,  on  which  ten  days 
are  allowed  for  collection,  should  be  entered  under  Dec.  27,  instead  of  Dec.  17.  Time 
for  collection  is  allowed  only  when  so  stated  in  the  text  book. 

Letters  of  advice  have  been  received  from  other  banks  stating  that  the  followinsf 
paper  has  been  collected  and  the  proceeds  placed  to  our  credit. 

No.  97.  From  Traders  National  Bank,  Buffalo,  No.  530,  collected  for  Martin  Bros. ; 
No.  563,  collected  for  C.  W.  Washburn.  Collection  and  exchange  charged  us  on 
each,  $1.25. 

In  the  Remarks  column  of  the  collection  tickler  for  each  item  write  Charge  T.  N.  B. 
12/18;  bank's  coll.  $1.25. 

No.  98.  From  Wayne  County  National  Bank,  Lyons,  No.  562,  collected  for  W.  II. 
Wood  ;  bank's  collection  and  exchange,  $2.00.  No.  586,  collected  for  Geo.  W.  Miner 
&  Co.;  bank's  collection  and  exchange,  $1.10.  No.  568,  collected  for  A.  B.  Curtis  & 
Co.;   bank's  collection  and  exchange,  $1.70.      Follow  the  instructions  for  No.  97. 

The  following  collection  paper  has  been  sent  to  other  banks  for  collection.  Nos. 
607  and  608  to  Farmers  National  Bank,  Philadelphia ;  Nos.  609  and  610  to  Traders 
National  Bank,  Buffalo.  Make  the  proper  entries  in  the  To  Whom  Sent  column  of 
the  collection  tickler. 

NOTE    TELLER'S    WORK 

Tuesday,  Dcccrnler  18 

The  following  paper  received  from  the  discount  clerk  has  been  collected  as  stated 
below . 

No.  99.     No.  -'580.  charged  to  Keeler,  Boynton  &  Co.,  the  makers. 

Turn  to  your  discount  tickler,  and  write  Charge  K..  Ti.  ,('•  Co.  in  the  Remarks 
column. 

No.  loo.  No.  394,  charged  to  Ballantiue  Bros.  &  Co.  Follow  the  instructions  for 
No.  99. 


68  MODERN    ILLUSTRATIVE    BANKING 

No.  101.     Note  No.  376,  not  being  paid,  is  protested  for  non-payment. 
Write  Protested  ;  fees,  $3.00  in  the  Remarks  column  of  the  discount  tickler. 

When  the  above  transaction  is  recorded  in  the  general  cash  book,  it  will  stand :  Protested  Paper 
debited  and  Bills  Discounted  credited. 

Some  banks  make  no  entry  at  all  when  paper  is  protested,  but  leave  all  such  paper  in  the  Bills 
Discounted  account  until  it  is  paid,  a  judgment  is  received,  or  it  is  found  to  be  worthless.  In  case  a 
judgment  is  obtained,  Judgment  account  is  debited  for  the  entire  amount  —  face  of  note,  interest, 
and  costs  —  Bills  Discounted  account  is  credited  for  the  face  of  the  note,  and  Interest  account  for  the 
interest  upon  it.  In  case  the- judgment  proves  to  be  worthless,  Loss  and  Gain  account  is  debited  and 
Judgment  account  credited. 

The  following  paper  received,  from  the  collection  clerk  has  been  collected  as  stated 
below. 

No.  102.  No.  580,  charged  to  maker.  Make  the  proper  entry  in  the  Remarks 
column  of  the  collection  tickler. 

No.  103.  Received  from  the  Bank  of  Monroe,  City,  New  York  draft  for  $1550.60, 
in  payment  for  collections  Nos.  570  and  600.  Write  Paid  12/18  in  the  Remarks 
column  of  the  collection  tickler  for  each  collection. 

No.  104.     No.  536,  charged  to  Martin  Bros. 

No.  105.  Received  cash  $2152.17  in  payment  for  collections  Nos.  613,  614,  and  619. 
Our  collection  and  exchange  on  Nos.  613  and  614,  $1.00  each  ;  on  No.  619,  $1.50.  Credit 
Collection  and  Exchange  in  the  general  cash  book  for  each  of  our  charges  for  collection 
on  above ;  also  make  the  proper  entry  in  the  Remarks  column  of  the  collection  tickler. 

No.  lOO.  Received  cash  $500  in  payment  for  collection  No.  622.  Our  collection 
and  exchange,  $1.00. 

No.  107.  Received  from  Bank  of  Monroe,  City,  New  York  draft  for  $2425.37,  in 
payment  for  checks  received  and  forwarded  to  that  bank.  Make  no  entry  at  this  time. 
The  New  York  draft  will  be  sent  away  by  the  mail  clerk. 

No.  108.  Received  from  Traders  National  Bank,  City,  a  New  York  draft  for 
$1000.50,  in  payment  for  checks  received  and  forwarded  to  that  bank.  Follow  the 
instructions  for  No.  107. 

No.  109.  Received  cash  $752.95  in  payment  for  checks  received  on  Mechanics 
National  Bank,  $552.95,  and  Benjamin  Hilton  &  Co.'s  sight  draft,  $200. 

The  amount  of  currency  in  your  hands  as  note  teller  is  $3405.12.  This  amount  is 
given  to  paying  teller.     You  have  on  hand  cash  items  to  the  amount  of  $2625.98. 

MAIL   CLERK'S   WORK 
Tuesday,  December  18 

The  following  remittances  of  cash  items  have  been  received  from  other  banks.  Enter 
the  total  of  each  remittance  to  the  credit  of  the  proper  bank  in  your  remittance  register* 

No.  HO.     From  Farmers  National  Bank,  Philadelphia. 

Sight  draft  on  Vacuum  Oil  Co.,  City,  for  $600  ;  certified  check  of  Keeler,  Boynton 
&  Co.  on  our  bank  for  $1200  ;  check  of  Fidelity  Mfg.  Co.  on  our  bank  for  $562.12. 
Letter  is  dated  Dec.  15. 


mail  clerk's  work  69 

No.  111.     From  Commercial  National  Dank,  Troy,  N.Y. 

Cheek  of  Arnold,  Ames  &  Co.  on  Wayne  County  National  Bank,  Lyons,  N.Y.,  for 
$126.52;  check  of  L.  T.  Meachum  on  Wayne  County  National  Bank,  Lyons,  N.V., 
for  8150.     Letter  is  dated  Dec.  17. 

No.  112.     From  Wayne  County  National  Bank,  Lyons,  N.Y. 

Sight  draft  on  Bell  Telephone  Co.,  City,  for  $1562  ;  check  of  J.  W.  Walton  on 
Mechanics  National  Bank,  City,  for  1162.46  ;  check  of  Geo.  W.  Miner  &  Co.  on  our 
bank  for  8506.20;  check  of  Wortbington  Bros.  &  Co.  on  Bank  of  Monroe,  City,  for 
$301.52.     Letter  is  dated  Dec.  17. 

You  have  sent  to  other  banks  the  following  paper  received  this  day  from  the  receiving 
teller,  paying  teller,  and  note  teller.      Make  the  proper  entries  in  the  remittance  register. 

No.  113.     To  Chemical  National  Bank,  New  York. 

Draft  of  Second  National  Bank,  Syracuse,  N.Y.,  on  Exchange  National  Bank,  New 
York,  for  $1624.31,  dated  Dec.  15,  indorsed  by  Martin  Bros.  ;  draft  of  Union  Trust 
Company,  Auburn,  N.Y.,  on  Exchange  National  Bank,  New  York,  for  $1500,  dated 
Dec.  11,  indorsed  by  Martin  Bros.  ;  draft  of  Fidelity  Trust  Company,  Oswego,  N.Y., 
on  Exchange  National  Bank,  New  York,  for  $150,  dated  Dec.  12,  indorsed  by  Black, 
Adler  &  Co.  ;  draft  of  Union  National  Bank,  LTtica,  N.Y.,  on  Chemical  National  Bank, 
New  York,  for  $210,  dated  Dec.  12,  indorsed  by  Black,  Adler  &  Co.  ;  draft  of  Bank 
of  Monroe,  Cit}r,  on  Chemical  National  Bank,  New  York,  for  81550.60,  dated  Dec.  18; 
draft  of  Bank  of  Monroe,  City,  on  Exchange  National  Bank,  New  York,  for  $2425.37, 
dated  Dec.  18  ;  draft  of  Traders  National  Bank,  City,  on  Ninth  National  Bank,  New 
York,  for  81000.50,  dated  Dec.  18. 

No.  114.     To  Wayne  County  National  Bank,  Lyons,  N.Y. 

Sight  draft  of  T.  J.  Stewart  &  Co.  on  Osgood,  Tower  &  Co.,  Lyons,  N.Y.,  for 
8122.43,  dated  Dec.  17,  indorsed  by  Martin  Bros.  ;  check  of  Arnold,  Ames  &  Co.  on 
Wayne  County  National  Bank,  Lyons,  N.Y.,  for  $126.52,  dated  Dec.  14,  indorsed  by 
Daniel  W.  Arnold;  check  of  L.  T.  Meachum  mi  Wayne  County  National  Bank,  Lyons, 
X.Y.,  for  $150,  dated  Dec.  14,  indorsed  by  Samuel  P.  Gould;  check  of  W.  B.  Shearer 
on  Wayne  County  National  Bank  for  $1320.40,  dated  Dec.  15,  indorsed  by  Ballantine 
Bros.  &  Co. 

No.  115.     To  Traders  National  Bank,  Buffalo,  N.Y. 

Certificate  of  deposit  in  favor  of  15.  E.  Valentine  from  Union  Trust  Company, 
Buffalo,  N.Y.,  for  $1260,  dated  Dec.  1,  indorsed  by  Black,  Adler  &  Co.;  sight  draft 
(if  Fidelity  Manufacturing  Co.  on  L.  P.  Ross  &  Co.,  Buffalo,  X.Y.,  for  $] 2(14.50,  dated 
I  >'•<•.  18,  indorsed  by  Fidelity  Manufacturing  Co.;  cheek  of  S.  S.  Slover  &  Co.  on 
Traders  National  Bank,  Buffalo,  N.Y.,  for  $120,  dated  Dec.  15,  indorsed  by  Ballantine 
Bros,  ov  Co. 

No.  116.     To  Commercial  National  Bank,  Troy,  N.Y. 

Check  of  L.  L.  Bender  on  Commercial  National  Bank,  Troy,  N.Y.,  for  $421.62, 
dated  Dec.  15,  indorsed  by  ('has.  M.  Deville;  cheek  of  F.  F.  Findlay  on  Commercial 
National  Bank,  Troy,  N.Y.,  for  $750,  dated  Dec.  15,  indorsed  by  E.  E.  Frey. 

No.  117.     To  Farmers  National  Bank,  Philadelphia. 


70  MODERN   ILLUSTRATIVE   BANKING 

Check  of  R.  D.  McLean  on  Farmers  National  Bank,  Philadelphia,  for  $200,  dated 
Dec.  10,  indorsed  by  C.  W.  Washburn  ;  check  of  Stewart  McVean  on  Farmers  National 
Bank,  Philadelphia,  for  $150,  dated  Dec.  10,  indorsed  by  C.  W.  Washburn ;  check  of 
Masten  &  Wolven  on  Farmers  National  Bank,  Philadelphia,  for  $126.50,  dated  Dec.  7, 
indorsed  by  R.  S.  Traver  ;  draft  of  Bradford  National  Bank,  Bradford,  Pa.,  on  Quaker 
City  National  Bank,  Philadelphia,  for  $420.62,  dated  Dec.  10,  indorsed  by  C.  B.  Moore. 

Foot  your  draft  book  and  enter  the  footings  in  the  remittance  register  and  cash 
book  as  explained  in  the  work  of  Dec.  17. 

Turn  to  the  collection  tickler  and  charge  the  proceeds  of  Nos.  530,  563,  562,  586, 
and  568  to  the  banks  to  which  they  were  sent. 

Credit  Farmers  National  Bank,  Philadelphia,  in  the  remittance  register  for  the 
proceeds  of  collections  Nos.  613  and  614.  Also  credit  Wayne  County  National  Bank, 
Lyons,  for  the  proceeds  of  collection  No.  619,  and  Traders  National  Bank,  Philadelphia, 
for  the  proceeds  of  No.  622. 

Turn  to  the  discount  tickler,  and  charge  Wayne  County  National  Bank,  Lyons,  in 
the  remittance  register  for  discount  No.  375.  Also  charge  Commercial  National  Bank, 
Troy,  for  discounts  Nos.  396  and  378. 

Rule  and  foot  the  remittance  register. 

INDIVIDUAL   BOOKKEEPER'S   WORK 
Tuesday,  December  18 

The  following  checks  on  our  bank  were  received  by  the  receiving  teller  and  mail 
clerk  and  passed  on  to  the  individual  bookkeeper  to  be  recorded  in  the  individual  ledger. 
Enter  each  item  in  the  Checks  in  Detail  column  of  the  individual  ledger. 

No.  118.     From  the  receiving  teller. 

Fidelity  Manufacturing  Co.,  $2016;  Fidelity  Manufacturing  Co.,  $1050 ;  Martin 
Bros.,  $240.10;  Chas.  M.  Deville,  $1200;  A.  B.  Curtis  &  Co.,  $12,000;  C.  W.  Wash- 
burn, $6221;  C.  W.  Beach  &  Bros.,  $1260;  Buffalo,  Rochester  &  Pittsburg  R.  R.  Co.. 
$1352.18  ;  certificate  of  deposit,  $4625. 

No.  119.     From  the  mail  clerk. 

Certified  check,  $1200;  Fidelity  Manufacturing  Co.,  $562.12;  Geo.  W.  Miner 
&  Co.,  $506.20. 

Fill  out  the  When  Paid  and  the  Amount  Paid  columns  of  the  certified  check  book 
for  the  $1200  check. 

The  paying  teller  paid  checks  on  our  bank  as  shown  by  the  paying  teller's  sheet 
From  Paying  Teller  to  Individual  Bookkeeper,  Dec.  18.  Enter  each  item  in  the  Checks 
in  Detail  column  of  the  individual  ledger. 

Foot  your  certified  check  book.  Debit  the  drawers  for  the  separate  checks,  in 
the  Checks  in  Detail  column,  and  credit  Certified  Checks  in  the  Deposits  column  for 
the  total. 

Turn  to  the  discount  tickler,  Dec.  16.  In  the  Checks  in  Detail  column  of  the  in- 
dividual ledger  charge  Ballantine  Bros.  &  Co.  for  No.  394,  and  Keeler,  Boynton  &  Co. 
for  No.  380. 


GENERAL    BOOKKEEPER'S    WORK  71 

Turn  to  the  collection  tickler,  Dec.  18,  and  charge  Martin  Bros,  for  No.  536,  and 
Lord  &  Taylor  for  No.  580. 

Extend  the  amounts  in  the  Checks  in  Detail  column  to  the  Total  Checks  column. 
Be  sure  that  your  additions  are  correct. 

The  cashier's  check  issued  during  the  day  as  shown  on  the  stub  of  the  cashiers 
check  book  should  be  posted  to  the  credit  of  Cashier's  Account  in  the  Deposits 
column  of  the  individual  ledger. 

Deposits  were  received  by  the  receiving  teller  as  shown  by  the  sheet  From  Receiving 
Teller  to  Individual  Bookkeeper,  Dec.  18.  Enter  each  item  in  the  Deposits  column  of 
the  individual  ledger. 

From  the  discount  register  credit  depositors  for  the  amounts  in  the  Proceeds 
Credited  column. 

The  following  credits  should  be  made  from  the  collection  tickler:  Dec.  13,  Martin 
Bros,  for  the  proceeds  of  No.  530  ;  Dec.  14,  Walter  H.  Wood  and  C.  W.  Washburn 
for  the  proceeds  of  Nos..  562  and  563,  respectively ;  Dec.  15,  Geo.  W.  Miner  &  Co. 
and  A.  B.  Curtis  &  Co.  for  the  proceeds  of  Nos.  586  and  568,  respectively  ;  Dec.  18, 
Black.  Adler  &  Co.  for  No.  536  and  No.  580;  C.  W.  Washburn  for  No.  570;  B.,  R. 
&  P.  R.  R.  Co.  for  No.  600. 

Extend  the  balances  in  the  individual  ledger,  foot  the  columns,  and  prove  the 

work. 

GENERAL    BOOKKEEPER'S    WORK 

Tuesday,  December  18 
No.  120.    Following  the  instructions  for  Dec.  17  make  the  entries  in  the  general 
cash   book,  as  follows: 

(a)  Post  the  footings  of  the  discount  register  to  the  general  cash  book. 

(b)  Rule  and  foot  the  discount  tickler.  Carry  the  footing  to  the  general  cash 
book. 

(c)  Debit  Protested  Paper  from  the  discount  tickler  for  discount  No.  376. 

(d)  Post  the  footing  of  the  Total  Checks  and  Deposits  columns  of  the  individ- 
ual ledger  to  the  general  cash  book. 

(e)  Post  the  totals  of  the  remittance  register  to  the  general  cash  book. 

(/)  Prove  the  cash.  The  difference  between  the  sides  of  the  cash  book  should 
equal  the  amount  in  the  hands  of  the  paying  teller,  plus  the  total  of  city  checks,  etc., 
in  the  hands  of  the  note  teller. 

The  paying  teller  had  on  hand,  Dec.  17,  $351,561 .01 .  Dec.  18  he  paid  out  $2<>«».">.:52,  received  from  the 
sale  of  New  York  drafts  $1567.75,  from  the  receiving  teller  $16,1.11,  and  from  the  note  teller  $3405.12, 
making  a  balance  of  • $370,50:}.  10.. n  hand  at  the  close  of  Dec.  18.  The  note  teller  has  cash  items  on 
hand  amounting  to  $2625.98.     The  balance  of  the  general  cash  book  should  therefore  be  $;>>3,219.14. 

(//)    If  everything  proves,  rule,  foot,  and  post  the  cash  book  as  explained  Dec.  17. 

(A)    Post  the  items  of  the  remittance  register  to  the  general  balance  ledger. 

(i)  Extend  the  balances  in  the  general  balance  ledger.  licmember  that  the  red 
ink  balances  should  at  all  times  equal  the  sum  of  the  black  ink  balances. 

If  your  work  proves,  make  a  statement  of  your  general  balance  ledger  similar  to  the 
following  form: 


72 


MODERN    ILLUSTRATIVE   BANKING 


General  Statement  of  First  National  Bank,  Dec.  18,  19 — 


Resources. 

Liabilities. 

-t 

Bills  Receivable  as  under: 

1.  Bills  Discounted 

2.  Protested  Paper 

120000 
3767 

10 

123767 

58000 
2500 
1683 

80799 
32348 

10 

19 

86 
92 

12.  Capital  Stock 

13.  Surplus  Fund 

14.  Undivided  Profits 

15.  Circulation 

16.  Banks  we  owe 

Due  depositors : 

17.  Cashier's  Checks 

18.  Certificates  of  De- 

posit 

19.  Certified  Checks 

20.  Notary  Fees 

21.  Individual  Deposits 

22.  Interest  and    Dis- 

count 

23.  Collection  and  Ex- 

change 

900 

500 

1500 

27 

132000 

13 

100000 

11750 

2518 

45000 

200 

134927 

3483 
1219 

42 

Stocks  and  Bonds : 

3.  U.  S.  Bonds  to  Secure 

Circulation 

4.  Premium   on   U.  S. 

Bonds 

5.  Other     Stocks    and 

Bonds 

50000 
1500 
6500 

01 

85 

92 

Properties : 

6.  Furniture  &  Fix. 

62026 
2250 

16523 

13 

Current  Expenses : 

7.  Sundry  Expenses : 

Banks  owing  us : 

8.  National 

9.  Redemption  Fund 
10.  Due   from    Reserve 

Agents 

7) 

18 

11.  Cash  on  hand  as  under : 
Bills 

Fractional  Items 
Cash  Papers 

30000 

148 

2200 

299099 

07 

299099 

07 

1 

HOW  TO   COMPILE   A    DAILY   STATEMENT 

1.  Balance  of  Bills  Discounted  from  the  general  balance  ledger. 

2.  Balance  of  Protested  Paper  from  the  g.  b.  1. 

3.  Balance  of  U.  S.  Bonds  to  Secure  Circulation  from  the  g.  b.  1. 

4.  Premium  on  U.  S.  Bonds  from  the  g.  b.  1. 

5.  Balance  of  Stocks  and  Bonds  from  the  g.  b.  1. 

6.  Balance  of  Furniture  and  Fixtures  from  the  g.  b.  1. 

7.  Balance  of  Sundry  Expenses  from  the  g.  b.  1. 

8.  Amount  owing  us  by  national  banks  other  than  those  which  are  approved  reserve 
agents,  as  shown  by  the  g.  b.  1. 

9.  Amount  deposited  with  the  United   States  Treasurer  for  the  redemption  of 
circulation,  as  shown  by  the  g.  b.  1. 

10.  Amount  we  have  deposited  with  national  banks  which  are  approved  reserve 
agents,  as  shown  by  the  g.  b.  1.     (National  Park  Bank,  New  York.) 

11.  Cash  on  hand,  as  shown  by  the  g.  b.  1. 

12.  Capital  Stock  paid  in,  as  shown  by  the  g.  b.  1. 

13.  Amount  of  Surplus  Fund,  as  shown  by  the  g.  b.  1. 

14.  Amount  of  Undivided  Profits,  as  shown  bjr  the  g.  b.  1. 

15.  Amount  of  Circulation,  as  shown  bjr  the  g.  b.  1. 

16.  Banks  we  owe,  as  shown  by  the  g.  b.  1. 


GENERAL    BOOKKEEPERS    WOKK 


n 


17.  Balance  of  Cashier's  Checks,  as  shown  by  the  individual  ledger. 

18.  Balance  of  Certificates  of  Deposit  issued,  as  shown  by  the  i.  1. 

19.  Balance  of  Certified  Checks,  as  shown  by  the  i.  1. 

20.  Amount  of  Notary  Fees,  as  shown  by  the  i.  1. 

21.  Amount  due  depositors,  as  shown  by  the  i.  1. 

22.  Balance  of  Interest  and  Discount,  as  shown  by  the  g.  b.  1. 

23.  Balance  of  Collection  and  Exchange,  as  shown  by  the  g.  b.  1. 

Every  banking  association  is  obliged  to  make  to  the  Comptroller  of  the  Currency  not 
.ess  than  five  reports  during  each  year,  according  to  the  form  which  may  be  prescribed 
by  him.  verified  by  the  oath  and  affirmation  of  the  president  or  the  cashier  of  each 
association,  and  attested  b}r  the  signature  of  at  least  three  of  the  directors.  These 
reports  must  exhibit,  in  detail  and  under  appropriate  heads,  the  resources  and  liabilities 
of  the  association  at  the  close  of  business  of  any  day  specified  by  the  Comptroller. 
Reports  must  be  transmitted  to  the  Comptroller  within  five  days  after  his  requisition 
therefor,  and  they  must  be  published  in  a  local  newspaper  in  substantially  the  same 
form  in  which  they  are  made  to  the  Comptroller. 

Present  your  statement  to  your  teacher  for  examination  and  approval.  If  your 
work  is  approved,  copy  the  statement  in  the  blank  books,  and  make  a  statement  of 
losses  and  gains  similar  to  the  form  given  below.  Your  furniture  and  fixtures  are 
inventoried  at  $1250.     Your  net  gain  should  be  $2121.45. 

Statement  of  Losses  and  Gains,  Dec.  18,  19 — 


Expense                                                                        excess  of  debits 
Furniture  and  Fixtures                              •                 "       "     " 
Collection  and  Exchange                                          excess  of  credits 
Interest  and  Discount                                                  "       ';     " 
Net  Gain                                                                     carried  down 

1683 
100 

.'HI  9 

19 

70 

1219 
3483 

IS 
71 

4702 

89 

4702 

89 

Xet  Gain                                                                      brought  down 
Surplus  Fund                                                           10%  of  net  gain 
Dividends                                                                  2%  of  capital  stock 
Undivided  Profits                                                    balance  of  net  gain 

291 

2000 

627 

97 
73 

2919 

70 

2919 

70 

2919 

■70 

In  joint  stock  companies  and  corporations,  where  the  profits  are  paid  in  dividends, 
the  net  gain  is  not  carried  into  Capital  Stoek  account,  but  is  transferred  to  the  Divi- 
dend,  Surplus,  and  Undivided  Profits  accounts. 

The  national  banking  act  provides  that  the  directors  of  any  national  banking 
association  may  semiannually  declare  a  dividend  of  so  much  of  the  nel  profits  of  the 
association  as  they  may  judge  expedient;  but  before  any  dividends  are  declared  one 
tenth  of  the  net  profits  of  the  preceding  half  year  must  be  carried  to  Surplus  Fund 
account,  until  the  same  shall  amount  to  20%  of  the  capital  stock  of  the  asso- 
ciation. 

In  addition  to  the  reports  mentioned  above,  all  national  banking  associations  musl 
report  to  the  ( Somptroller  of  the  Currency,  within  ten  days  after  declaring  any  dividend, 


1 4  MODERN    ILLUSTRATIVE    BANKING 

the  amount  of  such  dividend,  and  the  amount  of  the  net  earnings  in  excess  of  the 
same.  These  reports  must  be  attested  by  the  oath  of  the  president  or  the  cashier 
of  the  association. 

You  may  divide  the  net  profits  ($2121.45)  as  follows  : 

(«)    Surplus  Fund,  10  %  of  the  net  profits. 

(5)  Dividends,  1^  %  of  the  capital  stock. 

( c)    Undivided  Profits,  the  balance  of  the  net  profits. 

Next  close  the  accounts  in  the  general  balance  ledger  showing  losses  and  gains. 
This  is  done  by  making  the  following  entries  in  the  general  cash  book. 

(rt)  Debit  Collection  and  Exchange  for  $1200.33,  and  Interest  and  Discount  for 
15182.96. 

(b)  Credit  Furniture  and  Fixtures  for  $45  (the  excess  of  the  debit  balance  of  the 
account  over  the  inventory  for  furniture  and  fixtures).  Expense  for  $4216.84,  Loss  and 
Gain  for  $2121.45  (the  net  profits). 

Post  the  above  entries  to  your  balance  ledger,  under  date  of  Dec.  19th. 

Next  close  the  Loss  and  Gain  account  into  Dividends,  Surplus  Fund,  etc.  To  close 
this  account,  the  following  entries  must  be  made  in  the  general  cash  book. 

(a)    Debit  Loss  and  Grain  for  $2121.45. 

(6)  Credit  Dividends  for  $1500,  Surplus  Fund  for  $212.15,  Undivided  Profits  for 
$409.30. 

As  fast  as  the  dividends  are  paid  to  the  stockholders,  Dividends  will  be  debited  and  CasJi  credited. 
When  all  dividends  have  been  paid,  the  Dividend  account  should  balance. 

Post  the  above  entries  to  the  general  balance  ledger,  and  balance,  under  date  of 
Dec.  19,  and  rule  the  general  cash  book  again. 

Next  make  another  statement  of  resources  and  liabilities.  The  following-  form 
should  be*  used  as  a  guide. 

Statement  of  Resources  and  Liabilities,  Dec.  18,  19 — 


Cash 

Hills  Discounted 

Protested  Paper 

United  States  Bonds 

Stocks  and  Bonds 

Premium  on  U.  S.  Bonds 

Furniture  and  Fixtures 

Due  from  Other  Banks 

Redemption  Fund 

Capital  Stock 

Circulation 

Deposits 

Due  Other  Banks 

Surplus  Fund 

Dividends 
Undivided  Profits 


on  hand 

notes  discounted  and  unpaid 

notes  protested 

to  secure  circulation 

on  hand 

amount   above  par  value 

per  inventory 

total  debit  balances 

5  %  of  circulation 

amount  invested 

bank  notes  in  circulation 

total  due  depositors 

total  credit  balances 

credit  balance,  Dec.  15, 

10  %  of  net  gain,  Dec.  18 

2%  of  capital  stock 
credit  balance,  Dec.  15, 
balance  of  net  gain  Dec.  18, 


32348 

92 

120000 

3767 

Id 

50000 

6500 

1500 

2400 

78549 

86 

2250 

100000 

4501111 

134927 

200 

13 

11750^ 

291^ 

12042 
2000 

60 

2518" 

627^ 

3146 

15 

297315 

88 

297315 

88 

Present  all  your  work  to  your  teacher  for  examination  and  approval. 


PART   IV.     SUBSIDIARY   SUBJECTS 


A    CLEARING    HOUSE 

■ 

A  Clearing  House  is  a  place  where  associated  banks  meet  daily  to  effect  exchanges 
and  settle  balances  resulting  from  snch  exchanges. 

The  aggregate  amount  of  exchanges  represents  the  clearing  for  the  day. 

At  the  present  time  all  large  cities  have  clearing  houses,  and  nearly  all  the  banks  in 
these  cities  are  members.  Each  clearing  house  elects  its  own  officers  and  appoints  its 
own  committees. 

The  officers  are  usually  a  president,  a  vice  president,  a  secretary,  a  treasurer,  and  a 
manager. 

The  committees  comprise  a  committee  of  management,  a  committee  on  conferences, 
a  nomination  committee,  a  committee  on  admission,  and  an  arbitration  committee. 

The  manager  has  full  charge  of  the  settling  clerks  and  the  messengers  from  the 
different  banks  while  they  are  at  the  clearing  house.  He  directs  the  clerical  force  of 
the  clearing  house  and  dictates  the  manner  of  conducting  the  daily  business  transactions. 


Preparation  of  Exchanges.  Ranks  usually 
have  a  case  containing  compartments,  or  pigeon 
holes,  for  each  bank  which  is  a  member  of  the 
clearing  house.  This  case  is  technically  known 
as  the  "rack."  All  paper  for  the  clearing  is 
first  indorsed  with  a  rubber  stamp,  and  then 
placed  in  the  pigeon  hole  for  the  bank  on  which 
it  is  drawn.  At  the  close  of  the  day  the  items 
are  taken  out  of  the  compartments  and  the 
amounts  of  them  listed  on  an  envelope,  across 
the  end  of  which  is  printed  (1)  the  number  and 
name  of  the  bank  at  which  they  are  payable, 
and  (2)  the  number  and  name  of  the  bank  send- 
ing them  to  the  clearing  house.  A  duplicate 
list  is  afterward  made  by  an  assistant  and  pre- 
served by  the  bank  for  reference.  The  items 
are  then  placed  within  the  proper  envelopes. 
On  the  following  morning,  the  items  received 
in  the  early  mail,  called  "  morning  additions," 
are  assorted  and  listed,  and  then  put  within  the 
proper  envelopes. 

The  accompanying  illustration  shows  eleven 
pieces  "t  paper,  aggregating  *!U4x. :">«;,  which  is 
the  amounl  of  the  exchanges  carried  by  No.  G3, 
the  Second  National  Bank,  to  the  clearing  house 
against  No.  23,  the  National  Bank  of  Commerce. 

75 


Form  of  Clearing-house 
Envelope 


&{?■  23. 

IRational  Bank  of  Commerce. 

From  oAfo.  63. 

SECOND  NATIONAL  BANK. 


^66?22^/Jr/Z^l9- 


76 


MODERN    ILLUSTRATIVE    BANKING 


The  Delivery  Clerk's  Statement  shows  the  amount  of  exchanges  we  have  for  the 
different  banks.     It  is  prepared  as  soon  as  the  clearings  are  listed  on  the  envelopes,  the 


No.  12. 


Form  of  Delivery  Clerk's  Statement 
NEW    YORK    CLEARING    HOUSE 

from 
CHEMICAL    NATIONAL    <BANK 


2-<?  19- 


Del 

ivery 

Clerk's  Statement, 

No. 

BANKS. 

DR.  AMOUNTS. 

SIGNATURE. 

1 

Bank  of  N.Y.  Nafl  Bkg.  Ass'n, 

/  v^^2 

7y 

2 

Bank  of  the  Manhattan  Co,. 

f£<jT^/ 

22 

3 

Merchants'  National  Bank, 

3~C^23  / 

/  2 

4 

Mechanics'  National  Bank, 

£23 

w 

6    . 

Bank  of  America, 

3  23^ 

O-v 

7 

Phenix  National  Bank, 

/  6/<F23 

£*/ 

8 

National  City  Bank, 

623-/3/ 

2# 

10 

Tradesmen's  National  Bank. 

fy36* 

'Jf 

12 

Chemical  National  Bank, 

13 

Merchants'  Exch.  Nat.  Bank, 

63  £  £ 

'  fd- 

14 

Gallatin  National  Bank, 

c2~f3 t 

> 

15 

Nat'l  Butchers'  &  Drovers'  Bank, 

£ 2^/2  6 

'<Sf 

1 

16 

Mechanics'  &  Traders'  Bank, 

/  2  #3~£>6 

2t? 

• 

17 

Greenwich  Bank. 

/  4^f6 

18 

Leather  Manuf'rs  National  Bank, 

327 

£Z 

19 

Seventh  National  Bank, 

/3T£2* 

20 

Bank  of  State  of  N.  Y., 

Z-^33-/  2  6 

'ft 

21 

American  Exch.  National  Bank, 

6  23  rd? 

/*2 

23 

National  Bank  of  Commerce. 

<J~/j<?± 

,/f 

—  -x  ■ 

.^V 

A   CLEARING   HOUSE 


<S\b.  6- 


Bank  of  America. 


From  cNo.  12. 


CHEMICAL  NATIONAL  BANK. 


\?23  ^< 


o~/ 


Form  of  Clearing-house  Ttcket    items  being  copied  directly  from  the  envelopes 

on  to  this  statement.  Tickets  are  also  made  out 
which  show  the  amounts  of  the  items  for  the  dif- 
ferent banks.  These  tickets  are  taken  by  the  de- 
livery  clerk  to  the  clearing  house,  and  left  at  the 
desks  of  the  settling  clerks,  so  that  in  case  of  dis- 
agreement the  items  may  be  readily  checked  off. 
As  the  delivery  clerk  delivers  his  packages 
to  the  various  settling  clerks,  he  takes  their  re- 
ceipts therefor  on  his  statement.  This  is  accom- 
plished by  having  the  settling  clerks  write  their 
names  in  the  column  entitled  "Signature." 

The  Settling  Clerk's  Statement  shows  the 
amount  of  exchanges  taken  to  the  clearing,  the 
amount  received  from  the  clearing,  and  the  balance  due  us  or  due  by  us  to  the  clearing 
house,  as  the  case  may  be.  The  items  in  the  Debit  column  are  entered  therein  before 
going  to  the  clearing  house,  but  the  credits  cannot  be  entered  until  the  delivery  clerks 
give  us  such  exchanges  as  they  have  for  our  bank.  As  these  packages  are  delivered, 
the  settling  clerk  receipts  for  them,  and  enters  the  footing  of  each  to  the  credit  of  the 
bank  sending  it  to  the  clearing.  If  the  footing  of  the  Credit  column  is  in  excess  of  that 
of  the  Debit  column,  it  is  evident  we  have  received  more  from  the  clearing  than  we  took 
to  the  clearing,  and  the  difference  indicates  the  balance  we  owe  the  clearing  house. 
But  if  the  footing  of  the  Debit  column  is  greater  than  that  of  the  Credit,  we  took  more 
to  the  clearing  than  we  have  received  therefrom,  and  the  balance  is  in  our  favor.  (See 
form  of  settling  clerk's  statement,  page  78.) 

Credit  Ticket.  Before  going  to  the  clearing  house,  the  settling  clerk  makes  out  a 
credit  ticket,  showing  the  total  of  exchanges  for  the  clearing.  When  he  enters  the 
clearing  house  this  ticket  is  placed  on  the  manager's  desk,  and  a  clerk  immediately 
enters  the  amount  to  the  credit  of  the  bank  bringing  the  ticket. 

Form  of  Credit  Ticket 


O 


2 

© 


No.  12. 


CREDIT 


New  York  Clearing  House,   i^^-^/v-^-^.  19 


CHEMICAL  NATIONAL  BANK, 


Amount  of  Checks  to  Clearing  House  this  d»y  per  Messenger 


2- 


z<r  <? 


/  22- 


6^T~ 


Settling  CUfk. 


78 


MODERN    ILLUSTRATIVE   BANKING 


NEW    YORK    CLEARING    HOUSE 

No.   12.  CHEMICAL   NATIONAL   "BANK 


Settling  Clerk's  Statement,  J^272^yj.  ^  19 


No. 

BANKS. 

DEBIT. 

CREDIT. 

Nt> 

1 

Bank  of  N.Y.  Natl  Bkg.  Ass'n. 

1 
/  7f3~^/2    7  / 

/  f^r^/2  £  /  2 

I 

2 

Bank  of  the  Manhattan  Co.. 

•  <f£>jr^/  2  2 

/  3  ^22//   f  */ 

2 

3 

Merchants'  National  Bank, 

3~^^/23  /  /  2 

*/#  C  3  f  2  k3"& 

3 

4 

Mechanics'  National  Bank, 

623-<r& 

Z  fftZ2  £  / 

4 

6 

Bank  of  America, 

3  23  ^3~/ 

f  2r2f  33- 

6 

7 

Phenix  National  Bank. 

/  6  /  <T23~3  */ 

2  */2  dff  2  # 

7 

8 

National  City  Bank, 

6  23~/  3  7  2  0 

2  6  f  /3  *S2y 

8 

10 

Tradesmen's  National  Bank, 

& 73  6  */ 3  f 

/  2^3 2  6  /  *Z  <? 

10 

12 

Chemical  National  Bank, 

12 

13 

• 

Merchants'  Exch.  Nat.  Bank, 

C?3  &  &  I?  J" 

3~2  6  f  # 

13 

14 

Gallatin  National  Bank, 

<3~f3  <? 

2  2  6  fY  2-  £ 

14 

15 

Nat'l  Butchers'  &  Drovers'  Bank, 

6  2V26  */f 

/J  &  2  63~^3 

15 

16 

Mechanics'  &  Traders'  Bank. 

/  2.  #3' 6 >  2  f 

2  3  /  /  s/2  /  y 

16 

17 

Greenwich  Bank, 

/42f# 

2£ /J" 

17 

18 

Leather  Manuf'rs  National  Bank, 

3  2/  6  2. 

/  2/62  *2  # 

18 

19 

Seventh  National  Bank, 

23~d 2? 

ff  27  6 <r 

19 

20 

Bank  of  State  of  N.  Y., 

233~/  2  £  3*  # 

2  d23  t/23  ^/ 

20 

21 

American  Exch.  National  Bank, 

6 23 <r '<?  /  ^ 

3  6/  2f 3^3- 

21 

23 

National  Bank  of  Commerce, 

3~/3  7 2  /f 

2  73  ^2  6  3\ 

"    23 

Footings, 

22r#  /  2-2 

1 
63- 

7 
22  £ ' */# /^T3  7 

Balance 

/3~  2  0  ?  22^ 

/ 
22<F '  0  2  2  2\  63~ 

A    CLEARING    HOUSE 


79 


Balance  Ticket.  As  soon  as  the  clearing  is  completed,  and  the  settling  clerk  foots 
his  statement,  he  makes  out  a  balance  ticket  which  shows  the  amount  brought  to  the 
clearing,  the  amount  received  from  the  clearing,  and  the  balance  due  the  clearing  house, 
or  due  the  bank,  as  the  case  may  be.  This  ticket  is  delivered  to  the  manager  of  the 
clearing  house,  and  a  clerk  immediately  enters  it  on  the  clearing-house  proof. 

Form  of  Balance  Ticket 


5 


o 
z 

< 

< 

DC 


No.   12. 


New  York  Clearing  House, 


^y^/7,  19  — 


Amount  Received,  $ 
Amount  Brought,  $ 


z. 


.2 


z6^ 


2-J^*? 


f- 


/^r 


/  ZZ 


s 


6<J- 


Dsbit,  $ 


Balance  Due  Clearing  House. 


Credit  Balance  Due  CHEMICAL  NATIONAL  BANK,  $ 


2~#  7  ZJ* 


;      V^<^7-^7^*S-7&>7f.       Settling  Clerk. 


Routine  of  Business  at  the  Clearing-  House.  Each  bank  sends  to  the  clearing 
house  a  delivery  clerk  and  a  settling  clerk.  As  the  settling  clerk  enters  the  clearing 
house,  he  leaves  at  the  desk  of  the  manager  a  credit  ticket  (see  form,  page  77), 
showing  the  aggregate  of  the  exchanges  brought  to  the  clearing  house.  This  ticket 
is  entered  by  the  manager  on  the  clearing-house  proof  under  the  title  "  Banks  Cr." 

The  desks  at  the  clearing  house  are  usually  arranged  in  longitudinal  rows,  one  desk 
for  a  bank.  The  settling  clerk  takes  a  seat  at  the  desk,  while  the  delivery  clerk  stands 
directly  in  front  of  it,  with  his  packages  for  other  banks.  At  the  hour  of  the  clearing, 
which  is  usually  10  o'clock,  a  gong  is  rung,  and  each  delivery  clerk  advances  one  desk 
at  a  time  and  delivers  to  each  settling  clerk  the  items  and  the  clearing  house  ticket  for 
rack  settling  clerk's  bank,  taking  a  receipt  therefor  on  the  delivery  clerk's  statement 
(see  form,  page  76).  The  settling  clerk  enters  the  amount  on  his  own  statement  (see 
form,  page  78).  After  the  circuit  of  the  desks  is  completed,  the  delivery  clerk  gathers 
up  the  packages  which  have  been  left  on  the  settling  clerk's  desk  for  his  bank,  and  with 
these  packages  and  his  delivery  clerk's  statement  he  returns  to  his  bank.  He  also  takes 
with  him  a  memorandum  of  the  approximate  balance  in  favor  of  or  against  his  hank. 
The  settling  clerk  foots  his  statement,  ascertains  the  balance  due  to  or  by  his  bank, 
and  makes  out  a  balance  ticket  (see  form  above),  which  is  sent  to  the  manager's  desk. 
The  amounts  received,  as  shown  by  the  balance  tickets,  are  entered  on  the  clearing- 
house proof  (sec  form,  page  80)  in  the  "Banks  Dr."  column.  The  credit  balances 
due  banks  are  entered  in  the  column  entitled  "  Due  Banks."  The  debit  balances  due 
the  clearing  house  are  entered  in  the  column  entitled  -Due  Clearing  House."  The 
clearing-house  proof  is  now  footed.     The  "  Banks  Dr."  and  the  kw  Banks  ('v."  columns 


80 


MODERN   ILLUSTRATIVE   BANKING 


NEW  YORK  CLEARING  BOUSE  PROOF '.JUe^sSj-0.   19- 


No 


BANKS. 


DUE  CLEARING    HOUSE 


BANKS 


Cn. 


DUE   BANKS. 


I 

2 

3 

< 

6 

7 

8 
10 
12 
M 

l|4 
IS 
16 

17 
18 
19 

20 
21 
23 
25 
2/ 
29 
29 
30 
31 
32 
33 
34 
36 
40 
42 
44 
45 
47 

."' 
S3 
94 

59 
61 
62 


Bank  of  NY  Nat'l  Bkg.  Ass"n. 
Bank  of  the  Manhattan  Co.. 
Merchants'  National  Bank. 
Mechanics'  National  Bank. 
Bank  of  America. 
Phenix  National  Bank. 
National  City  Bank. 
Tradesmen's  National  Bank. 
Chemical  National  Bank. 
Merchants'  Exch.  Nat.  Bank. 
Gallatin  National  Bank. 
Natl  Butchers'  &  Drovers'  Bank. 
Mechanics'  &  Traders'  Bank. 
Greenwich  Bank 
Leather  Manufrs  National  Bank. 
Seventh  National  Bank. 
Bank  of  State  of  N   Y  . 
American  Exch   National  Bank 
National  Bank  of  Commerce. 
National  Broadway  Bank, 
vlercantile  National  Bank: 
Pacific  Bank. 

National  Bank  of  the  Republic, 
hatham  National  Bank, 
People's  Bank. 

National  Bank  of  North  America. 
Hanover  National  Bank. 
Irving  National  Bank. 
National  Citizens'  Bank. 
Nassau  Bank. 

Market  &  FuJlon  National  Bank. 
National  Shoe  &  Leather  Bank. 
Com  Exchange  Bank. 
Continental  National  Bank. 
Oriental  Bank. 

Importers  &  Traders  National  Bank 
National  Park  Bank. 
East  River  National  Bank. 
Fourth  National  Bank 
Central  National  Bank. 


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A    CLEARING    HOUSE 


81 


should  balance,  and  the  columns  entitled  "Due  Clearing  House"  and  "Due  Banks" 
should  balance.  Should  there  be  an  error  in  the  proof,  an  announcement  is  made  by 
the  manager,  and  the  settling  clerks  revise  their  work.  Forty -live  minutes  from  the 
time  of  commencing  is  allowed  for  a  proof.  All  banks  not  having  a  correct  statement 
at  10.45  A.M.  are  subject  to  a  fine.  For  all  errors  remaining  undiscovered  at  11.15  A.M. 
the  fines  are  doubled,  and  for  those  undiscovered  at  12  M.  quadrupled.  The  object  is 
to  offer  an  incentive  to  banks  to  have  at  the  clearing  house  clerks  who  are  rapid  and 
accurate  in  figures. 


INTERIOR    VIEW    OF   A    CLEARING    HOUSE 


Payment  of  Balances.  If  a  bank  has  received  more  checks,  etc.,  from  the  clearing 
house  than  it  has  brought  to  the  clearing  house,  it  is  evident  that  there  is  a  balance 
due  the  clearing  house.  When  this  balance  is  paid,  a  receipt  is  given,  similar  to  the 
one  at  the  top  of  page  82. 

In  New  York  all  balances  must  be  paid  by  the  debtor  banks  to  the  clearing  house 
between  12.30  and  1.30  P.M.  Payment  must  be  made  in  actual  coin,  United  States 
legal  tinder  notes,  or  clearing-house  certificates.  Should  any  bank  not  make  paymenl 
as  provided,  the  amount  of  its  balance  must  be  immediately  furnished  the  clearing 
house  by  the  several  banks  exchanging  with  the  defaulting  bank,  in  proportion  to  the 

I-,  v  skim;  — <i 


82 


MODERN    ILLUSTRATIVE    BANKING 


amount  of  their  respective  balances  against  that  bank.  The  defaulting  bank  is  at 
once  suspended  from  the  clearing  house.  At  1.30  p.m.,  or  as  soon  thereafter  as  the 
accounts  can  be  proved,  the  creditor  banks  may  receive  from  the  clearing  house  the 
balances  due  them. 

Form  of  Debit  Balance  Receipt 


m 
</> 

»    1 

© 

33       . 


Z 

St 
•a: 

J 


M 

as 

o 


:   * 

■    m 


ify -■■■■■■■  T 


No.  26.                                      New  York  Clearing  House,      \f<^^7^s^/2-tf_  19  — 
Received  irom  the    FIRST    NATIONAL   BANK,    


Dollars  in  full  for  balance  due  the  Associated  Banks. 


%^Z^2A^Z£z 


Ass't  [Manager. 


If  a  bank  brought  more  to  the  clearing  house  than  it  received  from  the  clearing 
house,  the  balance  would  be  due  the  bank,  and  payment  would  have  to  be  made  by  the 
clearing  house,  in  which  case  the  receipt  given  would  be  similar  to  the  following. 

Form  of  Credit  Balance  Receipt 


3 


New  York,_ 

Received  of  the  New  York  Clearing  House,  $ /cf^-^y^^ 

^^M^^^(^^^i-r^^^^^^\^W^^^/  -  Dollars, 


In  full  for  balance  due  from  Associated  Banks  this  day. 


CHEMICAL   NATIONAL   "BANK. 


No.  12. 


Cashier. 


In  the  smaller  cities,  balances  are  usually  settled  by  issuing  drafts  on  New  York, 
Boston,  Chicago,  or  other  financial  centers.  In  St.  Louis,  Cincinnati,  and  several  West- 
ern cities,  the  practice  is  to  settle  at  once  with  the  credit  banks  by  drawing  managers' 
checks  on  the  debit  banks. 

Weekly  Statement.  Some  clearing  houses  require  their  members  to  furnish  a 
weekly  statement  showing  the  average  amount  of  their  loans  and  discounts,  specie, 
legal  tender  notes,  circulation,  and  deposits. 


FOREIGN    EXCHANGE 


83 


FOREIGN    EXCHANGE 

Many  of  the  larger  banks  make  a  practice  of  selling  bills  of  exchange,  or  drafts,  od 
the  principal  financial  centers  of  England,  France,  Germany,  and  other  countries.  These 
drafts  are  generally  used  for  making  remittances,  though  travelers  sometimes  purchase 
them  instead  of  letters  of  credit.  The  method  of  handling  them  does  not  differ  from  that 
employed  for  domestic  drafts.  The  bank  which  draws  the  draft  must  keep  a  deposit 
with  the  bank  on  which  it  draws.  As  the  drafts  are  paid  they  are  charged  the  drawer 
the  same  as  checks. 

FOEM   OF    FOKEIGN    BlLL   OF    EXCHANGE 


Coo         O  O  OqO 


_J> 


f   /&.&n-*J7      St*. 


Rochester,  N.  K,  .J<f/^^7>7 ^s^S 2- 0   19 
u.  s.  A 


On  demand,  pay  this  SOLE  BILL  OF  EXCHANGE,  to  the 


Order  of 


y^<g> 


/ 


.Pounds  Sterling. 


Value  Received. 


No.  190    — s%^? 


i/Z^m-frT^Tz^ 


Cashier. 


A  record  of  a  foreign  bill  of  exchange  is 
made  on  the  stub,  thus  : 

Letters  of  Advice.  It  is  customary  for 
the  bank  which  draws  either  foreign  or  do- 
mestic drafts  to  send  a  letter  of  advice  to  the 
drawee  bank.  This  letter  should  state  the 
date,  number,  and  amount  of  the  draft,  and 
in  whose  favor  it  is  drawn. 

Foreign  bills  of  exchange  may  be  divided 
into  three  classes :  (1)  Bankers'  bills,  which 
are  drawn  by  bankers  on  bankers.  (2)  Com- 
mercial bills  (sight  and  time  drafts),  which 
are  drawn  by  merchants  on  their  customers. 
(3)  Documentary  bills,  which  arc  drawn  by 
merchants  on  shippers  and  are  accompanied 
by  bills  of  lading. 

The   form   of  a  documentary  bill  is  th<' 


Stub  of  Foeeign  Bill  of  Exchange 


No.     190 

Rochester,  N.  Y.,       ^       2^-tf  ~  19  - 


Received  from 


Z^Z—G 


%^-rty 


the  sum  of  $ Q. 


£z 


for  a  Draft  of  this  date  and  number,  in   favor  of 


iting  to  f;   y       /?        /? 


77^^J^~7C3^^^^^c=J^srf!*rn^7 


£22  . 


FARMERS  AND  MERCHANTS  BANK. 


(/J%o^2& 


Cashier. 


84  MODERN    ILLUSTRATIVE    BANKING 

same  as  that  of  an  ordinary  sight  or  time  draft.  Its  name  is  derived  from  the  fact 
that  it  is  attached  to  a  bill  of  lading  which  the  consignee  must  present  to  the  steam- 
ship company  before  the  goods  will  be  delivered  to  him.  As  possession  of  the  bill 
of  lading  can  be  obtained  only  by  honoring  the  draft,  payment  is  thus  made  for  the 
consignor's  goods  before  they  actually  go  out  of  his  possession.  It  is  practically  the 
same  as  making  C.  O.  D.  shipments  in  the  express  business. 

Posted  or  Nominal  Rates.  In  every  large  city  there  are  a  number  of  firms  and 
persons  that  make  it  their  business  to  buy  and  sell  foreign  bills  of  exchange.  The  rates 
that  they  daily  post  upon  their  bulletins  for  the  use  of  the  general  public  are  knowr  as 
the  posted,  or  nominal,  rates  of  exchange,  as  distinguished  from  the  actual,  or  real, 
rates  —  the  inside  terms  made  to  brokers. 

Buying  and  Selling  Exchange.  If  I  owe  a  person  in  London  £10,000,  I  can  ship 
him  -148,665.00  (the  par  value  of  a  pound  sterling  being  14.8665)  in  United  States 
gold,  or  I  can  purchase  a  foreign  bill  of  exchange  for  XI  0,000,  and  remit  it  to  him. 
The  cost  of  shipping  the  gold  would  be  \%  for  freight,  \°Jo  for  insurance,  and  from 
nothing  to  £%  f°r  abrasion. 

If  I  cannot  buy  a  bill  of  exchange  without  paying  more  than  $4.89  for  it,  the 
cheaper  way  would  be  to  ship  the  gold. 

If  a  person  in  London  owes  me  £  10,000,  and  I  must  bear  the  cost  of  collecting,  I 
can  draw  a  draft  on  him,  or  have  the  gold  shipped  to  me  to  be  sold  here  at  its  market 
value.  If  I  cannot  sell  the  draft  for  more  than  $4.84,  the  cheaper  way  would  be  to 
have  the  gold  shipped  to  me. 

If  our  sales  of  wheat,  cotton,  provisions,  etc.,  to  England  are  greater  than  our  purchases 
of  silks,  woolens,  and  fancy  goods  from  English  manufacturers,  it  is  evident  that  England 
will  owe  us  more  than  we  owe  her,  and  the  balance  of  trade  will  be  in  our  favor.  In 
such  a  case  there  would  be  more  persons  in  New  York,  Boston,  and  other  financial  centers 
offering  drafts  for  sale  (which  they  had  drawn  on  persons  to  whom  they  had  sold  goods) 
than  there  would  be  persons  desiring  to  buy  drafts  to  settle  accounts  owed  to  English 
firms,  and  exchange  would  be  low ;  that  is,  below  the  par  value  ($4.8665) .  When  exchange 
decreased  in  price  to  a  certain  point,  the  gold  would  flow  into  this  country,  as  it  would 
be  expedient  to  pay  the  cost  of  shipping  the  gold  from  England  to  this  country,  in  pay- 
ment of  a  debt  due,  rather  than  sell  a  draft  on  an  English  concern  for  $4.83  or  $4.84. 

Drawing  Drafts  through  Foreign-exchange  Bankers.  .  Certain  bankers  in  New 
York,  San  Francisco,  and  other  financial  centers  make  it  their  principal  business  to  deal 
in  foreign  exchange.  They  often  act  as  agents  for  banks  having  no  foreign  correspond- 
ents, permitting  such  banks  to  draw  their  drafts  directly  on  a  large  list  of  banks  vari- 
ously located,  so  as  to  cover  practically  every  quarter  of  the  civilized  world.  At  the 
time  of  drawing  the  drafts,  the  bank  sends  its  cashier's  check  covering  the  face  of  the 
drafts  and  the  commission,  together  with  a  letter  of  advice,  to  the  foreign-exchange 
banker  (in  this  country),  who  immediately  instructs  his  correspondents  to  honor  the 
drafts  as  drawn.  When  the  drafts  are  paid,  the  foreign  banker  charges  them  to  the 
foreign-exchange  banker  in  this  country,  and  not  to  the  drawer.  Thus  the  bank  draw- 
ing the  drafts  is  relieved  of  the  trouble  and  expense  incident  to  keeping  deposits  with 
foreign  banks,  while  it  possesses  practically  all  the  advantages  such  deposits  would  afford. 


LETTERS    OF   CREDIT 


85 


LETTERS    OF    CREDIT 

Letters  of  Credit  are  usually  issued  to  travelers,  who  are  thus  enabled  to  obtain 
the  current  money  of  whatever  country  they  may  visit,  in  such  amounts  as  are  best 
suited  to  their  convenience. 

By  subscribing  his  name  at  the  bottom,  the  holder  of  a  letter  of  credit  provides  a 
simple,  yet  effective,  means  of  identification,  and  whenever  he  wishes  money  he  has 
only  to  present  his  letter  to  any  of  the  banks  (usually  four  or  five  hundred  in  number) 
named  in  the  list  furnished  him  at  the  time  of  purchase,  and  this  bank  will  fill  out  a 
draft  on  the  London  banker  to  whom  the  letter  is  directed.  The  traveler  signs  the 
draft,  and  if  the  signature  corresponds  to  that  shown  at  the  bottom  of  the  letter,  the 
amount  desired  is  inscribed  on  the  inside  thereof,  and  payment  is  immediately  made. 
The  letter  denotes  at  all  times  the  amount  still  available,  and  is  a  guide  to  any  banker 
to  whom  it  may  be  presented.  The  bank  cashing  the  draft  which  exhausts  the  credit 
is  required  to  remit  it  to  the  London  bank. 

Form  of  Letter  of  Credit 


front 


Circular  Letter  of  Gredit 

jvb.M&^M/// 

&    ''  CM Di'liv  ADDRESSED  TO  THE  CORRESPONDENTS 

*"  Knauth,JVachod  &  Kuhne. 

&^£<C?M.-0  <-/       NEW  YORK.  ^/C^-c^  &£Lf     Sf/7 


S^i^-^^a//^ 


s"?lS 


parr's  jSanfe,  Ximiteo,  TLonDon,  ***6^jL ^^^^4 

^Aby/W/s/ sAsr^/.4s>w.  ^Z"s>-*bm,  ^U;f//e/^s2^^//*/t'i',s-Ae7i.y:&*,'*4j£,a/t,M; 


-7 


7- 


86 


MODERN   ILLUSTRATIVE   BANKING 


Letters  of  credit  are  usually  drawn  in  pounds  sterling,  which,  at  the  present  time, 
is  the  most  generally  used  and  least  fluctuating  money  in  the  world.  The  drafts,  how- 
ever, are  paid  in  the  current  money  of  the  country  in  which  they  are  negotiated.  The 
letters  are  drawn  against  cash  deposits,  or  collateral  affording  sufficient  guarantee  of 
repayment,  and  at  the  time  of  issue  a  letter  of  advice  containing  a  full  description  of 
the  credit  is  forwarded  to  the  drawee  bank  and  to  all  correspondents  to  whom  it  is 
likely  to  be  presented.  Banks  usually  charge  l<f0  commission  for  issuing  a  letter  of 
credit,  with  a  minimum  rate  of  $5.00.  In  case  such  a  letter  is  lost,  the  holder  should 
immediately  notify  the  London  banker  on  whom  it  is  drawn,  unless  differently 
instructed. 

As  will  be  seen,  the  identification  lies  wholly  in  the  comparison  of  the  signatures, 
though  there  are  some  bankers  who  give  a  description  of  the  payee  in  the  letter  of 
credit,  stating  his  age,  color  of  eyes,  size  of  nose,  mouth,  kind  of  chin,  color  of  hair, 
complexion,  height,  etc. 


Form  of  Letter  of  Credit 


REVERSE 

(When  used,  showing  payments  made.) 


BANKERS  WILL  PLEASE  INSCRIBE   PAYMENTS  IN  THEIR  ORDER  ON  THESE  PACES 


DATE  WHEN 
PAID 


BY  WHOM  PAID 


NAME  OF  TOWN 


AMOUNT  PAID  EXPRESSED  IN 
WORDS 


AMOUNT 
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TRAVELERS     CHEQUES 


87 


TRAVELERS'    CHEQUES 

The  express  companies  and  several  foreign-exchange  banks  and  bankers  issue 
travelers'  cheques  which  are  payable  to  one's  own  order  by  a  large  number  of  corre- 
spondents throughout  the  world.  These  cheques  are  practically  the  certified  cheques  of 
the  express  companies  and  banks,  as  the  payment  of  the  cheques  for  the  amount  named 
on  the  face  is  absolutely  guaranteed.  At  the  time  of  purchase,  the  buyer  signs  his 
name  in  the  upper  left-hand  corner.  When  he  wishes  funds,  he  simply  presents  his 
cheque  to  the  correspondent  of  the  express  company  or  bank  and  signs  his  name  in  the 
lower  left-hand  corner  in  the  presence  of  the  one  to  make  payment.  If  the  two 
signatures  agree,  the  money  is  immediately  given  him  without  question.  The  cheque 
affords  absolute  protection  to  the  purchaser.  Should  an  unpaid  cheque  be  lost,  the 
purchaser's  name  forged,  and  the  cheque  cashed  by  the  express  company  or  the  bank, 
the  company  or  bank  cashing  the  cheque  would  sustain  the  loss. 

Travelers'  cheques  are  issued  in  denominations  of  $10.00,  $20.00,  $50.00,  $100.00, 
and  $200.00.  The  charges  are  very  reasonable,  being  \%  for  foreign  cheques  and  \c/0 
for  cheques  payable  in  this  country. 

Form  of  Traveler's  Cheque 


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INDEX 


Auxiliary  books,  36. 

Balance  ticket,  7!». 
Bank,  bookkeepers  of,  15. 

books  of,  24. 

cashiers  of,  14. 

definition  of,  7. 

directors  of,  1<>. 

president  of,  14. 

tellers  of,  14. 
Bank  book,  41. 

entering  collections  in,  53. 

form  of,  20. 

method  of  writing,  19. 
Bank  drafts,  47. 
Banker.  7. 

Hankers  and  brokers,  13. 
Banking  customs,  15. 
Bank  officers  and  clerks,  14. 
Banks,  business  of,  7. 

kinds  of,  7. 

Capital  stock,  payment  of,  11. 

securing  subscriptions  to,  9. 
Cashier's  check,  65. 
Cashier's  check  book.  53. 

Certificate  of  authority  to  commence  business,  12. 
Certificate  of  deposit  book,  33. 
Certificate  of  payment  of  stock,  11. 
Certificates  of  deposit,  43. 
«     i  tified  check  book.  32. 
( !erl iti'-ii  checks,  l<>. 

Check  raising,  devices  for  preventing,  15. 
Checks,  forged  and  raised,  L9. 

method  of  canceling,  1'.). 

method  of  paying.  1 1. 

stopping  payment  of,  17. 
Circulating  notes,  12. 
Circulation,  1 1. 
Clearing  house,  a,  75. 

committees  of,  75. 


Clearing  house,  a. 

managers  of,  75. 

officers  of,  75. 

payment  of  balances  of,  81. 

preparing  exchanges  of,  75. 

routine  of  business  at,  79. 

weekly  statements  of,  82. 
Clearing-house  proof,  81. 
Collection  and  cash  items  distinguished,  32. 
Collection  and  exchange,  15. 
Collection  clerk,  duties  of,  53. 

work  for,  53,  66. 
Collection  paper,  39,  53. 
Collection  register,  29. 
Collection  tickler,  29. 
Commercial  bank.  7. 
Comptroller  of  the  currency,  8. 
Credit  ticket,  77. 

Days  of  grace,  49. 
Delivery  clerk's  statement,  76. 
Deposits,  examination  of,  41. 
Directors,  election  of,  10. 

number  and  qualifications  of,  10. 
Disbursements,  sources  of,  7. 
Discount  clerk,  duties  of,  48. 

work  for,  48,  65. 
Discount  register,  26. 
Discount  tickler.  28. 
Dividend  book,  36. 
Dividends  and  surplus,  9. 
Draft  1 k.  32. 

Exchange,  method  of  buying  and  selling,  84c 
posted  or  nominal  rates  of,  si. 

Foreign  exchange,  83. 

General  balance  ledger,  34. 
General  bookkeeper,  duties  of,  61. 
work  for,  61,  71. 


89 


90 


INDEX 


General  cash  book,  26. 

Incoming  papers,  40. 

Individual  bookkeeper,  duties  of,  59. 

work  for,  59,  70. 
Individual  ledger,  34. 
Installment  book,  36. 

Letter  of  credit,  a,  85. 

Letters  of  advice,  83. 

Loan  and  trust  companies,  how  organized,  13. 

business  of,  13. 
Loans,  48. 

Mail  clerk,  duties  of,  57. 

work  of,  57,  68. 
Messengers,  55. 
Minute  book,  36. 
Miscellaneous  supplies,  40. 

National  bank,  a,  7. 

capital  of,  9. 

examiners  of,  8. 

liability  of  stockholders  of,  8. 

name  of,  9. 

organization  of,  9. 

powers  of,  8. 

reports  of,  9. 

reserve  of,  9. 
Notary  fees,  23. 
Notes,  accumulated  interest  on,  51. 

method  of  finding  due  date  of,  49. 

method  of  paying,  55. 

when  charged  to  a  depositor,  55. 
Note  teller,  duties  of,  55. 

work  for,  55,  67. 
Notice  to  comptroller  of  the  currency,  10. 

Officers,  of  a  bank,  11. 

of  a  clearing  house,  75. 
Organization  certificate,  10. 
Organization  of  a  national  bank,  9. 
Outgoing  papers,  40. 
Overcertifying  checks,  9. 

Paying  teller,  duties  of,  44. 
work  for,  44,  64. 


Persons,  number  necessary  to  organize  a  national 

bank,  9. 
Powers  of  national  banks,  8. 
Private  bankers,  12. 
Private  banks,  8. 
Profits,  sources  of,  7. 
Protest,  certificate  of,  21. 

notice  of,  22. 
Protesting,  20. 

Real  estate,  8. 
Receipts,  sources  of,  7. 
Receiving  teller,  duties  of,  41. 

work  for,  41,  63. 
Remittance  register,. 29. 

Savings  banks,  how  organized,  13. 

compared  with  state  and  national  banks,  13c 

interest  allowed  depositors  in,  13. 

investments  of,  13. 

purpose  of,  13. 
Settling  clerk's  statement,  77. 
Sight  paper,  method  of  handling,  29. 

received  for  credit  of  others,  32. 

remitted  for  our  credit,  31. 
State  banks,  how  organized,  12. 

advantages  of,  12. 

circulating  notes  of,  12. 

compared  with  national  banks,  13. 
Statement,  general  daily,  72. 

of  losses  and  gains,  73. 

of  resources  and  liabilities,  74. 
Stock  certificate  book,  36. 
Stock  ledger,  36. 
Subscription  book,  36. 
Sundays  and  holidays,  28. 

Tax  on  circulation,  11. 
Time  for  discounting  notes,  49. 
Timing,  53. 
Transfer  book,  36. 
Travelers'  cheques,  87. 

United  States  bonds,  11. 
Vouchers,  40. 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


4 


«    ' 


Form  L-9 

20m -1,  '42(8519) 


XJNIV .  CALIFORNIA 

AT 
LOS  ANGELES 


HG 

1G11     Neal- 


K25m     i-odern  illustrat 
1904 — ive  "banking 

DEMCO  234N 


m 

1611 

N25m 
1904 


.u.<j  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  600  426 


